Morning Commentary
Perhaps sniffing a beat from Nvidia (NVDA) after the close, all the market indices rallied hard during the last hour into the closing bell. Interestingly, all the major equity indices also swooned with the release of the Federal Open Market Committee (FOMC) minutes from the previous gathering. It looks like caution was the key feature yesterday:
“Most participants noted the risks of moving too quickly to ease the stance of policy and emphasized the importance of carefully assessing incoming data in judging whether inflation is moving down sustainably to 2%.”
"Several participants mentioned the risk that financial conditions were or could become less restrictive than appropriate, which could add undue momentum to aggregate demand and cause progress on inflation to stall."
With Fed rate cut probabilities already down significantly since that last FOMC meeting, the initial pullback on the minutes was quickly erased as investors looked toward the future.
The Philly Fed Service report was a ‘miss’ as well. The headline number was -8.8, reflecting sharp declines in new and unfilled orders. There was more erosion in the number of workers and a huge spike in wages.
"Drive"
Who's gonna tell you when
It's too late?
Who's gonna tell you things
Aren't so great?
You can't go on thinking
Nothing's wrong, oh oh
Who's gonna drive you home
Tonight? -The Cars
It was a brutal 20-Year Bond auction with a record tail of 3.3 basis points (bps) and foreign buyers dipping to 58.5% from more than 74% in November. To borrow a line from The Cars: who’s going to buy our bonds?
Rotation
The money came out of Technology (XLK) and scattered everywhere. Energy (XLE) was the biggest gainer, followed by Utilities (XLU). Investors decided to try traditional safe havens.
That was a sizable move in Utilities, which presents the best old-school value on the board.
Communication Services (XLC) and information technology brought up to the rear. That probably will not be the case today. #Justsaying.
Market Breadth
There was a general flight to blue chip names, resulting in more advancers than decliners, more new highs than lows, and more excellent up volume than down volume.
Market Breadth |
NYSE |
NASDAQ |
Advancers |
1,423 |
1,562 |
Decliners |
1,391 |
2,700 |
New Highs |
96 |
60 |
New Lows |
32 |
115 |
Up Volume |
2.05 billion |
1.90 billion |
Down Volume |
1.71 billion |
2.95 billion |
Never Nervous Nvidia
You will hear accolades all day for NVDA, which beat the consensus in every measure. There was some quibbling about guidance not beating the whisper number, but the quarter was pure dominance.
Back in the Pool…The Water’s Fine
The shares spiked in after-hours trading.
This bodes well for the artificial intelligence (AI) and semiconductor universe, but I am worried about other issues mentioned in this report that don’t seem to matter anymore.
Until they do!
Portfolio Approach
We are adding a new position in Technology this morning in the Hotline Model Portfolio. If you are not a current subscriber to our Premium Hotline service, contact your account representative, or email Info@wstreet.com to join today.
Today’s Session
There is an air of excitement, which continues to nudge risk appetite higher. You must participate but keep your wits about you as well.
Comments |
Charles, Why isn't more being mentioned (it seems like this should be pointed out daily) in the Financial Media about how the 8 million illegal immigrants are helping keep our employment numbers high (unemployment numbers low) and inflation sticky, mainly with all the government money being given out to them? Thanks! David on 2/22/2024 11:58:13 AM |
Tweet |
5/2/2024 7:23 AM | COOL HAND POWELL |
5/1/2024 1:22 PM | Which Powell? |
5/1/2024 9:40 AM | MAY DAY, MAY DAY, MAY DAY |
4/30/2024 1:02 PM | Complete Flop |
4/30/2024 9:48 AM | CHIPS TAKE THE LEAD |
4/29/2024 1:39 PM | Musk Rides Back to the Mag Seven |
4/29/2024 9:50 AM | DIE BY THE SWORD, PROSPER BY THE SWORD |
4/26/2024 1:46 PM | Full Steam |
4/26/2024 9:39 AM | BIG TECH STEPS UP |
4/25/2024 1:16 PM | Don't' Bury me, Yet! |
4/25/2024 9:27 AM | THERE CAN ONLY BE ONE |
4/24/2024 1:30 PM | Earnings Flood In |
4/24/2024 9:26 AM | BUYING THE DIP |
4/23/2024 1:25 PM | Bloom Off Rose |
4/23/2024 9:32 AM | WHAT HAPPENED TO THE BRAVADO? |
4/22/2024 1:22 PM | Pins and Needles |
4/22/2024 9:30 AM | LIVE BY THE SWORD … |
4/19/2024 1:20 PM | Fair Chunk of Rotation |
4/19/2024 9:35 AM | DON’T OVERREACT |
4/18/2024 1:37 PM | Didn’t Break Down |
4/18/2024 9:40 AM | MARKET OFF SCRIPT |
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 |
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