EB Daily Market Report - Thursday, April 11, 2024

Tom Bowley - April 11, 2024

Executive Market Summary

Futures were down overnight, but they reversed and turned higher after the March PPI provided some relief to traders, coming in at or below consensus estimates
After a gap higher, our major indices have continued pushing higher, particularly the NASDAQ
Technology (XLK, +2.09%) is leading today's rally, while consumer discretionary (XLY, +1.12%) and communication services (XLC, +1.01%) have added to the strength
Health care (XLV, -0.33%) and financials (XLF, -0.33%) are lagging on the session
Crude oil ($WTIC, -0.66%) is down a bit, while gold ($GOLD, +1.48%) and silver ($SILVER, +1.42%) remain very strong
Apple (AAPL, +4.27%) is having its best day in awhile, leading a big rebound in computer hardware ($DJUSCR, +4.03%)
Get ready for earnings as JP Morgan (JPM), Citigroup (C), and Wells Fargo (WFC) report their latest results tomorrow morning - more on these 3 stocks below

Market Outlook

I like to keep a close eye on our intermarket relationships whenever we run into inflationary concerns (or any concerns for that matter). Here's how a few of those key relationships look right now:

This chart is VERY encouraging for bulls. The mid-February to late-March is typically a "flight to safety" time of the quarter and that's exactly what we saw in 2024. Now that we've moved into April, you can see the improvement on all of these ratios.

So let me ask you a question. Is Wall Street worried right now about inflation? I don't think so.

Sector/Industry Focus

The 3 aggressive growth sectors are leading today as the NASDAQ regains a leadership role. While the XLK has been a better sector in 2024, I do like today's reversal off price support on the XLY:

The big problem with discretionary is that it's struggled on a relative basis. Perhaps we'll see that change into Q1 earnings season.

ChartLists/Strategies

Let's take a quick glance at the 3 large banks set to kick off earnings season tomorrow morning:

JPM:

WFC:

All 3 banks look quite solid and should give us a look into how banks are performing. We definitely want to see good reports out of these 3 as they've been leaders among their banking peers.

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 11:

STZ, FAST, KMX

Friday, April 12:

JPM, WFC, PGR, BLK, C, STT

Economic Reports

Initial jobless claims: 211,000 (actual) vs. 215,000 (estimate)

March PPI: +0.2% (actual) vs. +0.3% (estimate)

March Core PPI: +0.2% (actual) vs. +0.2% (estimate)

Happy trading!

Tom