EB Daily Market Report - Tuesday, April 23, 2024

Tom Bowley - April 23, 2024

Upcoming Schedule

I will be leaving Wednesday around noon and will not return until sometime Sunday afternoon or evening. ChartLists won't be updated this Friday and will be delayed until the following Friday/weekend. The Weekly Portfolio Report will likely be postponed until the following week. When I return Sunday afternoon or evening, I'm planning to record a Weekly Market Recap Video, that will likely be in lieu of a Weekly Market Report (written) that I typically provide on Monday. I'll need Monday to prepare for our next afternoon webinar, "Q1 Earnings", which will begin at 5:00pm ET. I doubt that I'll have time to record a Fab 5 setups video.

There will be no Trading Places Live show on Thursday morning, though I am planning to do one on Wednesday. I also plan to host our Live Trading Room on Wednesday morning at 10am ET. It will be a brief 30 minute session and I'll be answering questions for the majority of it.

I apologize for any inconvenience in advance, but it's always good to get away periodically. I will be following the market while I'm gone and, if I see anything unusual, I'll pass it along to John Hopkins, who will provide a very brief market update on Wednesday, Thursday, and Friday. Everything should be completely back to normal by Monday, April 29th.

Executive Market Summary

Futures were higher overnight and our major indices did gap higher at the opening bell
There was a bid under the market throughout the session, though we have seen some weakness in the past 30 minutes or so
Perhaps the best news so far is that the Volatility Index ($VIX, -6.73%) has fallen back from a recent high of 19.31 today's low of 15.73
New home sales for March were well ahead of expectations, but February's new home sales were revised a similar amount lower
Commodities are mixed, although crude oil ($WTIC, +1.83%) has spiked back above $83 per barrel
The 10-year treasury yield ($TNX) has fallen 2 basis points to 4.60%; there was a big drop early this morning, triggering buying in U.S. equities, especially small caps (IWM, +1.73%)
10 of 11 sectors are higher today, following all 11 being higher yesterday; communication services (XLC, +1.67%) and technology (XLK, +1.47%) are showing strength
Materials (XLB, -0.84%) is the only sector down on the session as steel ($DJUSST, -5.47%) is under pressure
GE is among our best performers today, rising 7.89% after reporting quarterly results

Market Outlook

Any time we see a price breakdown on the daily chart, followed by a death cross (20-day EMA falling beneath the 50-day SMA), the first step in repairing the chart technically is to close back above the 20-day EMA. Here's how the SPY, QQQ, and IWM look in that respect after this week's nice recovery thus far:

SPY

QQQ

IWM

Breakouts above levels marked by red arrows would be the first technically-bullish step, while failure at these levels could lead to another round of selling in the current pullback.

Sector/Industry Focus

While not specifically related to any one sector or industry group, earnings thus far this quarter have been very strong. During all of last week, 87 companies with market caps greater than $1 billion reported results. 65 beat earnings estimates, while 5 matched estimates. Only 17 missed earnings estimates. 56 beat revenue estimates, while 31 fell short. Historically, these are excellent results. However, it appears that the market is in a "sell on news" environment - at least thus far.

ChartLists/Strategies

Some companies reporting solid results are seeing rewards. American Express (AXP), our EB Digest stock from last week, was rewarded and it continues to be. After reporting better-than-expected results on Friday morning, AXP opened at 218.84 and now trades at 238.38. Yesterday, in Monday morning's EB Digest, I featured General Electric (GE) as another stock that looked very solid heading into earnings. This morning, GE knocked it out of the park with earnings that exceeded expectations by 22%. While revenue fell a bit short, GE has been rewarded today with a jump of 7.81%.

Later this afternoon, I'll be hosting our "Q1 Earnings" event, which starts at 4:30pm ET. I'll explain how I use relative strength to identify stocks likely to produce solid earnings results.

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.

Tuesday, April 23:

V, TSLA, PEP, NVS, DHR, GE, PM, TXN, RTX, NEE, UPS, LMT, CB, FI, CNI, SHW, FCX, SPOT, GM, KMB, MSCI, HAL, CSGP, BKR, NVR PHM, VLTO, STLD, WRB, STX, IEX, EQT, ENPH, DGX, AGR, MANH, LKQ, PNR, EWBC, WFRD, MAT, LRN, JBLU, XRX

Wednesday, April 24:

META, TMO, IBM, NOW, T, LRCX, BA, BSX, WM, GD, CP, CMG, CME, APH, ORLY, NSC, E, HLT, F, ODFL, TEL, WCN, URI, HUM, OTIS, VRT, BIIB, FTV, RJF, WAB, ICLR, ETR, ALGN, MOH, ROL, RCI, TDY, TYL, AVY, SYF, BMRN, LII, MAS, WSO, BG, GGG, TER, EDU, OC, MORN, IPG, UHS, NLY, CHE, AR, CHDN, SEIC, TX, CACI, EH, KNX, SF, HAS, EVR, LAD, VKTX, DAR, CHX, WHR, MTH, CLS, GPI, MHO, HLX, MXL

Economic Reports

March new home sales: 693,000 (actual) vs. 670,000 (estimate)

Happy trading!

Tom