Morning Commentary
The market has been mostly sideways for weeks, failing to break out but also holding at critical support points. But within this story is another story of violent rotation. The number of 1.0% moves in individual stocks are wild.
Hot one day (in a hip way) and hot the next (like a potato), money is moving in and out based on daily narratives, which mostly echo chamber noise. If you use tight stops, you could be right, but a couple days early, and lose money.
Sector Performance & Heat Map
The same phenomenon of swift and constant rotation is happening with sectors. For example, Energy (XLE) began last week, rocketing higher on the Organization of the Petroleum Exporting Countries (OPEC) news but ended the week with heavy losses.
Losing Air
Earlier this year, it looked like an ‘all hands-on deck’ rally, powered by wide participation. Since then, market breadth has deteriorated, as those names at new highs have declined sharply. The good news is there haven’t been a lot of disasters, but too many unanswered questions and concerns are holding the market back.
Understand, we are investing in individual stocks; sometimes, individual names actually fare better than the broad market.
Earnings Season
Earnings are in a recession; for many, that’s a no-go for owning stocks. But the best four 12-month post bear market low periods all happened amid declining earnings.
There are several reasons for this, including margin expansion and the simple fact stocks look forward, and the news you get tomorrow is already baked into the share price.
The Jobs Report
It was not a ‘strong’ jobs report. I watched the financial media do its usual version of that old dance, ‘The Twist,’ to make the number more than it was. Supposedly, the number beat the whisper, but the whisper did not include 47,000 government jobs. Job losses in manufacturing, construction, temp, and retail matter. But I think Powell & Co. should take solace in 460,000 folks returning to the labor force.
The Street may talk it up and try to push stocks lower – we will take advantage of that.
Portfolio Approach
There are no sector weighting changes this morning in our Hotline Model Portfolio.
Today’s Session
The market is looking to stumble out of the gate as mega cap names are looking lower, including Tesla (TSLA), which just lowered prices again.
While there have been strong moves in Healthcare and Energy, it’s hard to replace the leadership of mega tech.
So much news this week, including the PCE report.
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4/17/2024 1:59 PM | Facing Pressure |
4/17/2024 9:37 AM | POWELL STILL WANTS TO HELP |
4/16/2024 1:35 PM | Muted |
4/16/2024 9:42 AM | FEAR ARRIVES |
4/15/2024 1:17 PM | Making a Statement |
4/15/2024 9:45 AM | Equal Opportunity Drubbing |
4/12/2024 1:37 PM | Pressure Overall |
4/12/2024 9:42 AM | WHO YA GONNA CALL? |
4/11/2024 1:38 PM | No Urgency |
4/11/2024 9:27 AM | Tough Sledding |
4/10/2024 1:22 PM | Hang In There |
4/10/2024 9:51 AM | HERE COMES THE LATEST RATIONALE FOR PERSISTENT INFLATION |
4/9/2024 1:56 PM | Fighting the Trend |
4/9/2024 9:46 AM | NEXT TIME, MAKE IT A HOLIDAY |
4/8/2024 9:45 PM | Cautious Feel |
4/8/2024 7:19 AM | IT’S ECLIPSE DAY |
4/5/2024 1:51 PM | Higher and Cheaper |
4/5/2024 9:23 AM | MARKETS REEL ON BIDEN’S ISRAEL ULTIMATUM |
4/4/2024 1:42 PM | Stocks Bounce |
4/4/2024 9:31 AM | ESCAPING GRAVITY = ESCAPING REALITY? |
4/3/2024 1:41 PM | Cuts Not Soon |
4/3/2024 9:33 AM | A LITTLE LESS SWAGGER |
4/2/2024 1:16 PM | Under Pressure |
4/2/2024 9:49 AM | HIGHER PRICES & JOBS LOSS – “NO” ON FED BINGO CARD |
4/1/2024 10:00 AM | OF COURSE, HE CAN WAIT…THE DATA STILL NOT ADDING UP |
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