EB Daily Market Report - Thursday, April 4, 2024
Executive Market Summary
- Futures were higher overnight and we did see an opening gap higher
- Most areas of the market were very quiet, with little volatility, until 2pm ET
- There was much FedSpeak today as many Fed Presidents were lined up to speak this afternoon
- One notable remark came from Minneapolis Fed President Neel Kashkari who suggested there could be no rate cuts this year - unbelievably crazy in my opinion!
- Crude oil ($WTIC, +1.32%) has spiked again, this time to over $86.50 per barrel, lifting energy (XLE, -0.32%) to the top of the leaderboard, even though it is down
- Health care (XLV, -1.40%) is the worst-performing sector as all 11 sectors are lower
- Semiconductors ($DJUSSC, -2.90%) are notably weak with Advanced Micro Devices (AMD, -7.79%) breaking beneath its 50-day SMA for the first time since this rally began in late-October
Market Outlook
Brief report today.
Tell me what this crazy Fed will say next and I'll tell you (maybe) what the stock market might do. I can't recall a Fed as unpredictable as this one. It makes investing very, very difficult. Didn't we just have a Fed meeting like two weeks ago? Fed Chief Powell said that 3 rate cuts were still likely and really said nothing different. Now he has his "pawns" out planting seeds about the possibility of NO rate cuts? You can't make this stuff up.
Completely irresponsible, if you ask me.
Anyhow, it's definitely having a significant impact on trading today. The stock market LOATHES uncertainty and the Fed's drama is not sitting well with traders. If tomorrow morning's nonfarm payrolls is hotter than expected, we could see ugly red futures.
Sector/Industry Focus
Volatility ($VIX, +16.33%) is having perhaps its biggest gain of 2024 and probably the biggest since the correction last summer. Surges in the VIX generally result in lower stock prices. Right now, anything goes. I'd use this weakness to buy in cheaper, but again, we must remember the nonfarm payrolls report. Tomorrow morning is like placing your money on red or black at the roulette wheel and hoping you hit.
Not my style.
ChartLists/Strategies
I would definitely hold off on all buying at this time. I remain fully confident that we'll see stocks higher in time, but it's difficult to guard against these out-of-the-blue Fed comments. It's also difficult to fathom the amount of money being lost, because of these comments. Listen, I'm fine with dissenting opinions and so forth, but the Fed meeting just ended two weeks ago. Could things have really changed so much that we've gone from 3 rate cuts to considering no rate cuts at all?
Crazy.
Earnings Reports
Here are the key earnings reports for the next two days, featuring stocks with market caps of more than $10 billion. I also include notable companies with market caps below $10 billion. Finally, any portfolio stocks that will be reporting results are highlighted in BOLD. If you decide to hold a stock into earnings, please understand the significant short-term risk that you are taking. Please be sure to check for earnings dates for any companies that you own or are considering owning.
Thursday, April 4:
RPM, LW, CAG, SMPL
Friday, April 5:
None
Economic Reports
Initial jobless claims: 221,000 (actual) vs. 212,000 (estimate)
Happy trading!
Tom