Yesterday was an indecisive session where most would-be buyers and sellers were okay with cooling their heels, but enough showed up into the closing bell to move the needle. Volume was light, and buying was focused on safety.

Market Breadth	NYSE	NASDAQ
Advancers	1,958	2,270
Decliners	1,282	2,381
New Highs	25	55
New Lows	60	150
Up Volume	2.23 billion	1.92 billion
Down Volume	1.36 billion	2.29 billion

Even bonds were indecisive after threatening a big move that might have closed a huge gap on the ten-year yield chart.

Heat Map

Eight of eleven sectors finished higher, but the ones with the real heft to move the market were like anvils all session.

Energy (XLE) staged a strong bounce, and Financial (XLF) got a nudge from higher yields, but it was mostly a defensive session.  It was a day for staying in the market with the least amount of near-term risk.

Yikes, Another Walmart Warning

After the close Walmart (WMT) lowered guidance again pointing to the ravages of inflation, which is making even discounted stuff seem like luxuries these days.

It is not good news even if the media tries to frame it as such.

Interestingly, retailers were coming back nicely in part from oversold conditions but also over this notion they can weather the one-two punch of inflation and then recession.  It gets back to that mythical $2.5 trillion in “excess savings” economists are always bragging about.

There is no doubt a lot of money is sloshing around out there, but the masses are not sitting on a pile of money like Scrooge McDuck.

According to Moody’s, the cash is divvied up with the vast majority in households with $188,000 in income.  Everyone else, especially in the upper middle class, have little elbow room.

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Technical View

I am watching Consumer Discretionary (XLY) and the SPDR S&P Retail ETF (XRT) for the collateral damage from the Walmart (WMT) warning. And keep an eye on Amazon (AMZN), which reports later this week.

The XRT couldn’t break through a staunch resistance point and now might dive back under its 50-day moving average.

Reaction from the Titans

In the week after posting financials the last time out, three of the big five mega-cap stocks saw share prices lower, a switch from reactions to the September quarter when all traded higher. Nevertheless, they have the tall order of bringing some hope to the market.

Earnings Reactions	March 2022	Dec 2021	Sep 2021
Google (GOOG)	-4.2%	+7.8%	+4.5%
Microsoft (MSFT)	+4.3%	+1.7%	+4.2%
Facebook (META)	+2.8%	-28.0%	+0.5%
Apple (AAPL)	-4.2%	+9.7%	-1.0%
Amazon (AMZN)	-19.6%	+12.9%	+1.2%

Portfolio Approach

There are no sector weighting changes this morning in our Hotline Model Portfolio.

Today’s Session

I have to admit, the market is holding up much better than I assumed when my head hit the pillow last night. Of course, the session hasn’t started, and we have seen plenty of sessions when a snowball rolls up to a boulder by the closing bell.

Inventories will weigh on retail along with inflation narrowing options.

Other Blue-Chip names are indicating higher on earnings, including McDonalds (MCD), 3M (MMM), and Coca-Cola (KO).  

The shift will be to Technology during the session and after the bell.

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