It was one of those sessions yesterday where the finish didn’t reflect the anxiety of the session, but it was reflected in market breadth metrics.

Market Breadth	NYSE	NASDAQ
Advancers	1,333	1,992
Decliners	1,702	2,581
New Highs	86	100
New Lows	51	135
Up Volume	1.86 billion	1.86 billion
Down Volume	2.29 billion	3.09 billion

There was lots of crimsons on the screen, with oil names standing out.

Sector Performance

Energy (XLE) was one of only three sectors that finished higher on the session.

West Texas Intermediate (WTI) has traded in a very tight range but could be ready to make a substantial move in either direction, although it seems more likely it would be higher. A close above $80.00 brings $89.00 into play.

Hover Pad

The S&P 500 has levitated above the 200-day moving average like a magic show attraction created by Servais Le Roy (see below):

Servais Le Roy (4 May 1865 – 2 June 1953 was a Belgian magician, illusion designer and businessman. He is known for the act Le Roy, Talma, and Bosco and as the inventor of the classic levitation illusion Asrah the Floating Princess.

I must say it’s very impressive, and if the market somehow turns higher from here, the legend of the 200-day moving average as a resistance and support point would take on a legendary status.

 

If the 200-day moving average gives way, we see 3,800 as the next downside test.

Today’s Calendar

It’s all about the Initial Jobless Claims this morning.

CRM Scores

Salesforce.com (CRM) beat the Street on revenue and earnings, but that was only the beginning of the fun. Margins climbed higher. A cynic would question two things on margins:

• Can they go higher?
• The disparity between the  generally accepted accounting principles (GAAP) and the (non-GAAP) earnings, an alternative accounting method used to measure the earnings of a company.

Again, you want to see this as a shareholder along with strong free cash flow.

Guidance was amazing… it beat the consensus for the quarter and a full year.

Conclusion

I admit I got the urge to sell when I saw the cover of their presentation (a little corny), but hard to argue the strong quarter, guidance, and $20 billion buyback.

I’m sure the activists will demand more, but even they should be thrilled this morning.

Portfolio Approach

We took profits on a position in Consumer Discretionary in our Hotline Model Portfolio.

Today’s Session

Data out this morning is sending bond yields higher and pressuring stocks, especially high Beta names that generally struggle during higher interest rate spikes.

Initial Jobless Claims

Coming in at 190,000 against consensus of 195,000

Labor Productivity

Four quarter productivity in 2022 stumbled badly as unit labor costs climbed much more than anticipated.

• Productivity 1.7% from 3.0% in prior quarter - consensus 2.5%
• Unit Labor Cost 3.2% from 1.1% prior quarter - consensus 1.6%

This is backward-looking, but the trend doesn’t help the narrative of a Fed pause.  

Meanwhile, Macy’s (M) beat, and the stock is spiking.  The consumer is on borrowed time but will spend big time until they can’t spend anymore, which could take some time.

Tweet

 

Home | Products & Services | Education | In The Media | Help | About Us | Disclaimer | Privacy Policy | Terms of Use | All Rights Reserved.