Financial News vs. Noise
Big Tech drives S&P 500 to best week since November as investors shrug off inflation worries-MarketWatch
So we had a GDP number that signals possible stagflation and a PCE that was in line, but continues to show sticky inflation, and the market rallied on Friday. Interestingly, and perhaps importantly, SPY tried to test it’s 50 day and failed.
Look for that as a key level to the upside this week. $507.37 would be my first support level.
QQQ is still below the 50 but did pull a UR at the 10 day MA and 20 day EMA. The 10 day could be used as a stop for a long entry.
Forgetting about the fact that both are below their 50 days, they both could be taken long here with a bunch of good spots for stops. As long as we are below the 50 though I would be cautious. I do own some VIX calls, which closed right above it’s 200 day and is well off the highs from last week.
I also have some TLT puts. TLT is in a nice looking downtrend which could reverse if it gets back above it’s 10 day.
This week we have more earnings, most importantly AAPL and AMZN, a ton of data, most importantly jobs, and of course FOMC. So anything could happen. Continue to watch rates, which came down on Friday but are still in a clear uptrend (hence the downtrend in TLT)
and the semi’s, which popped back above the 50 day.
NVDA continues to be the key name to watch in this market. Last week it accounted for over 25% of the S&P’s gain.
TSLA up big this morning on this. Musk Wins China’s Backing for Tesla’s Driver-Assistance Service-WSJ. Currently above $180 which puts it back above the 50 day and puts the 200 and 210 gap fill on the table.
Last week I pointed out a possible rotation into consumer staples and utilities. Both of those areas sold off Friday as we saw a rotation back into higher beta.
Meanwhile…
Fulton Financial acquires Republic First Bank after first U.S. bank failure of 2024-MarketWatch
First and last? Or tip of the iceberg.
Something that I don’t think enough people are talking about. Short of another crisis it is doubtful the neutral interest rates is anywhere near what it was in the past. Even If the Fed Cuts, the Days of Ultralow Rates Are Over-WSJ
But when the Fed raised the fed-funds rates to 5.3% last year, the highest since 2001, the economy appeared to shrug it off, giving reason to think neutral might be higher. “The economy has weathered this exceptionally well. No one could have told me 10 years ago we would have raised rates to this level with this outcome,” said Joe Davis, chief global economist at Vanguard. “Our conviction in a higher neutral rate is going up as every quarter of data comes in.”
For most people investing for income is stupid. Especially when rates have been rising. What to Do With Bonds When Inflation Won’t Die-WSJ
Long-term bond funds lost nearly a third of their value over the past three years. And economic data so far this year, including Thursday’s gross domestic product reading, have rekindled fears that inflation may not be tamed.
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