Stocks are wobbling from an extended S&P; not just from ‘State of the Onion’ Address, which basically showed ‘proof of life’ if you wish to view what seems to have been a caffeinated President adhering to his Party’s talking points. In a sense that aspect was disappointing; as there should be more bipartisan or National interests expressed, such as in handling the Border and so on. That is not to say the presumed opponent was any more proper with his tweeting. Anyway there’s plenty to critique on both sides of the aisle if desired.
Once again Job numbers were superficially improving with backward revision that creates curiosity as to the methodology of computing data is so many get revised and significantly not nominally. However there’s no argument here as to the extended nature of S&P, and it held relatively well considering Nvidia, which shook out notably.
Market X-ray: We should be within or on the threshold of more shakes for the S&P; and certainly Nasdaq, with respect to the mega-cap leadership. At the same time as we saw with previews the other day, small-cap broadening-out is key to the market, but they generally can’t hold together absent S&P too.So the macro strategy is sort of optimistic, but allows for irregularity along the way. Next week we get CPI and PPI, and if they’re ‘friendly’, it will encourage ideas of a nearer-term Fed rate cut; as did the downward Jobs revisions yet again. Lots of areas are softening; and ‘credit card’ debt shows a tapped-out consumer, which we’ve already tried to point-out. Sorry if that conflicts with a different view among politicians, but that’s what the facts continue to suggest; and it’s further justification for at least one Spring Funds rate cut by the Fed.
If you haven’t noticed, ‘The Ides of March’ falls right on Quarterly Expiration next Friday… and perhaps that will be a short-term bottom for Nasdaq and S&P, as certainly there is fluff coming out of NVDA and a few others.Spending is not strongly driving this market; even certain cruise-line bookings are not filling-up as solidly as the companies maintain the case. You’ll see it in ‘deals’ that start to appear even for this Summer; and certainly for 2025 or other early bookings. Also a couple cruise-lines are impacted by the Red Sea war; as they can’t risk transiting Suez. This affected RCL and Virgin for sure; and probably others (can’t do repositioning to the Med without circling Africa).
Regardless, this is an erratic time for the market. Quarterly Expiration as well as inflation numbers next week leaves a lot on-hold for now; in terms related to whether S&P can hold high levels or a shakeout turns into a trend, with all significant corrective bottoming awaiting April or even into May for some. This has been too much of an overall S&P advance not to retreat at least ‘some’.Now, we may well be in and remain-in a ‘secular bull market’, which doesn’t mean we don’t get corrections or more than ‘pauses to refresh’ along the way (while hard to factor-in the sequence). I know people still like the mega-caps (with a dubious argument of growth outperforms value…) while I prefer that perception of value precedes growth in share-price. Sometimes that doesn’t work or takes longer than investors prefer, as clearly is the small-cap case.
Bottom line: pattern continuation, with NVDA giving concern finally as to the prospects for a mega-cap correction that might have some legs. Hard to say on all or others, given pressures in both directions that can occur going into a Quarterly Expiration, which ‘on top of CPI and PPI’, is coming up at the end of the new week. Enjoy the weekend.
More By This Author:Market Briefing For Thursday, March 7
Market Briefing For Wednesday, March 6
Market Briefing From Friday, March 1
