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Morning Commentary

A LITTLE LESS SWAGGER †

By Charles Payne, CEO & Principal Analyst
4/3/2024 9:33 AM

Considering yesterday’s rough start, it wasn’t an awful session. Some bloom has come off the rose, and the sense of ‘extreme greed’ from one month ago is moving toward neutral.

Market Breadth

Market breadth was negative, save for more new highs than new lows on the New York Stock Exchange (NYSE). The number of decliners and down volume on the NASDAQ Composite hints at profit-taking.

Market Breadth

NYSE

NASDAQ

Advancers

704

1,178

Decliners

2128

3,097

New Highs

101

70

New Lows

38

134

Up Volume

1.24 billion

1.34 billion

Down Volume

2.61 billion

3.34 billion

Crude Breakout 

West Texas Intermediate (WTI) broke out, and oil-related stocks followed. The move in crude oil is a combination of seasonality and growing signs of economic rebound in China.

The screen had lots of red, but Meta (META) and Salesforce (CRM) stand out in the crowd.

S&P 500

The S&P 500 trading channel is etched in stone. On the downside, I would initially worry at a test of 5,100 and then 5,063 (50-day moving average). The Relative Strength Index (RSI) is still above 50, and the rate of change is nebulous at best (or worse).

All things being equal, it was an excellent time to test the rally.

Nowhere to Hide

Small-caps got socked the hardest, but there wasn’t anywhere to hide.

According to the CME FedWatch Tool, the chances of a rate cut in June edged higher.

Today’s Session

The market looks to open under some pressure, as all eyes and ears await Fed Chair Powell speaking at noon.  The ADP jobs report is not a reliable tool for guessing the government report out on Friday, but the trends usually match. With that in mind, the inflationary aspect of the report jumps out to me. I love seeing goods producing jobs and wage gains, but Powell & Co are going to bristle if these numbers are repeated on Friday.


 

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