Morning Commentary
It was another strong move yesterday into the closing bell, and it got the market on the cusp of a major breakout point: 4,100 on the S&P 500.
Energy (XLE) led the way, followed by Consumer Discretionary (XLY) as Consumer Staples (XLP) brought up the rear – the only declining sector.
Shift Continues
The surge in Consumer Discretionary against Consumer Staples has picked up even more steam creating the second gap opening this year. To a degree, this is about the overvaluation of Consumer Staples coming into the year. Still, it’s mostly a proxy for confidence, as I have been pointing out those safe haven sectors are hemorrhaging buyers.
The Heat Map
There was a lot of red in Health Care (XLV), along with Consumer Staples (XLP) as those mega-cap names kept powering higher.
For the year, monster moves have already happened. It’s obvious the market is getting ahead of itself. Perhaps the next test isn’t a breakout, but how limited profit-taking will be when it happens. I think it would be limited, and the only thing that could break this market is the Federal Reserve.
Make no mistake. Powell & Co. are trying to figure out how to derail this thing.
But the Cumulative Advance-Decline Line is surging – hitting a net of 186 (the New York Stock Exchange (NYSE) & the NASDAQ Composite (COMP) yesterday, and it’s a good proxy for where the market is heading.
Portfolio Approach
We are taking profits on a position in Technology this morning in our Hotline Model Portfolio.
Today’s Session
Personal income and spending numbers came in mostly in line with estimates. The story to me is people are reacting to slower personal income growth.
Month to Month |
Actual |
Consensus |
Prior |
Personal Income |
0.2% |
0.2% |
0.4% |
Personal Spending |
-0.2% |
-0.2% |
0.1% |
The savings rate has climbed to 3.4% in December from 2.9% in September.
Powell’s Inflation Gauge
Inflation eased in December and seemed to be making sustained strides lower. Powell should be smiling.
PCE Year to Year |
Actual |
Consensus |
Prior |
Headline |
5.0% |
5.0% |
5.5% |
Core |
4.4% |
4.4% |
4.7% |
PCE Month to Month |
Actual |
Consensus |
Prior |
Headline |
0.1% |
0.0% |
0.1% |
Core |
0.3% |
0.3% |
0.2% |
Highlights
We are waiting on Michigan Sentiment data and Pending Home Sales.
Watching Intel (INTC), which laid an egg last night- total disaster just as the semis we trying to build head of steam.
Tweet |
3/18/2024 1:48 PM | Mag 7 is Back |
3/18/2024 9:39 AM | THE PARTY IN SAN JOSE WILL BE LIT |
3/15/2024 1:38 PM | Realtors Settle |
3/15/2024 9:33 AM | AN UNEASY PAUSE |
3/14/2024 1:43 PM | Sticky Inflation |
3/14/2024 9:48 AM | GOING TO A GO-GO |
3/13/2024 2:16 PM | Taking a Breather |
3/13/2024 9:51 AM | ALL SO EPIC |
3/12/2024 1:42 PM | Marching Higher |
3/12/2024 9:25 AM | ROTATION IN FULL SWING |
3/11/2024 1:41 PM | Sharpening Pencils |
3/11/2024 9:38 AM | BUYING THE DIPS |
3/8/2024 1:51 PM | Stocks Wobble |
3/8/2024 9:45 AM | A COUPLE OF JUGGERNAUTS |
3/7/2024 1:48 PM | Back In Charge |
3/7/2024 9:33 AM | ON AUTOPILOT |
3/6/2024 1:24 PM | Not Yet |
3/6/2024 9:34 AM | TOUGH IT OUT |
3/5/2024 1:16 PM | Stumble |
3/5/2024 9:49 AM | OLD-SCHOOL SIGNS OF LIFE |
3/4/2024 1:34 PM | Mixed Start |
3/4/2024 9:51 AM | PROMETHEUS & MARKETS UNBOUND |
3/1/2024 1:19 PM | Starting on a High |
3/1/2024 9:36 AM | NEW HIGHS BEGET NEW HIGHS |
2/29/2024 1:17 PM | TMI |
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