Morning Brief
Headline News:
The S&P 500 futures are down 2 points and are trading in line with fair value. The Nasdaq 100 futures are down 63 points and are trading 0.5% below fair value. The Dow Jones Industrial Average futures are up 30 points and are trading 0.1% above fair value.
Futures tied to the Dow Jones Industrial Average outperform thanks to gains in JPMorgan (JPM) and UnitedHealth (UNH), which are helping to offset weakness in Boeing (BA). Meanwhile, losses in the mega space have weighed down the broader market despite some underlying strength from bank stocks following this morning’s earnings reports.
JPMorgan, Wells Fargo, and PNC Financial all reported better-than-expected Q1 earnings. Citigroup will be releasing its results shortly.
In other news, House Speaker Kevin McCarthy will introduce a plan next week to raise the debt ceiling for one year with spending cuts, according to Bloomberg.
Treasury yields are little changed from yesterday’s settlement levels. The 2-yr note yield is unchanged at 3.99%, and the 10-yr note yield is up one basis point to 3.46%. The U.S. Dollar Index is flat at 100.99.
(Michael Gibbs, Director of Equity Portfolio & Technical Strategy)
Markets:
The S&P 500 rallied sharply, moving past resistance at 4133.13 to close higher at 4146.22. RSI also increased to support the rally closing at 64.041, and upside volume came in at 71% of the total volume. The S&P 500 moved out of the small base, which should lead to a test of the high for the year of 4195.44 on 2/2/2023. However, potential resistance at 4159.77 could mean choppy trading for the next few days. Today, we feel the new possible support level of 4133.13 will hold if tested.
We are currently Intermediate-term bearish and short-term bullish.
John N. Lilly III CPFA
Accredited Portfolio Management Advisor℠
Accredited Asset Management Specialist℠
Portfolio Manager, RJFS
Partner, DJWMG
Windsor Wealth Planners & Strategist
Futures trading is speculative, leveraged, and involves substantial risks. Investing always involves risk, including the loss of principal, and futures trading could present additional risk based on underlying commodities investments.
The Relative Strength Index (RSI), developed by J. Welles Wilder, is a momentum oscillator that measures the speed and changes of price movements.
The advance/decline line (A/D) is a technical indicator that plots the difference between the number of advancing and declining stocks on a daily basis. The indicator is cumulative, with a positive number being added to the prior number, or if the number is negative, it is subtracted from the prior number.
The A/D line is used to show market sentiment, as it tells traders whether there are more stocks rising or falling. It is used to confirm price trends in major indexes and can also warn of reversals when divergence occurs.
The percentage of stocks trading above a specific moving average is a breadth indicator that measures internal strength or weakness in the underlying index. The 50-day moving average is used for short-to-medium-term timeframes, while the 150-day and 200-day moving averages are used for medium-to-long-term timeframes. Signals can be derived from overbought/oversold levels, crosses above/below 50%, and bullish/bearish divergences.
The Dow Jones Industrial Average (DJIA), commonly known as “The Dow,” is an index representing 30 stocks of companies maintained and reviewed by the editors of the Wall Street Journal. The Russell 2000 Index measures the performance of the 2,000 smallest companies in the Russell 3000 Index, which represent approximately 8% of the total market capitalization of the Russell 3000 Index.
The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S stock market. Past performance may not be indicative of future results. Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investors’ results will vary. Opinions expressed are those of the author John N. Lilly III, and not necessarily those of Raymond James. “There is no guarantee that these statements, opinions, or forecast provided herein will prove to be correct. “The information contained was received from sources believed to be reliable, but accuracy is not guaranteed. Investing always involves risk, and you may incur a profit or loss. No investment strategy can guarantee success. The charts and/or tables presented herein are for illustrative purposes only and should not be considered as the sole basis for your investment decision. International investing involves special risks, including currency fluctuations, different financial accounting standards, and possible political and economic volatility. Investing in emerging markets can be riskier than investing in well-established foreign markets.
This is not a recommendation to buy or sell any company’s stock mentioned above.
US government bonds and treasury bills are guaranteed by the US government and, if held to maturity, offer a fixed rate of return and guaranteed principal value. US government bonds are issued and guaranteed as to the timely payment of principal and interest by the federal government. Bond prices and yields are subject to change based on market conditions and availability. If bonds are sold prior to maturity, you may receive more or less than your initial investment. Holding bonds to term allows redemption at par value. There is an inverse relationship between interest rate movements and bond prices. Generally, when interest rates rise, bond prices fall, and when interest rates fall, bond prices generally rise.
The Nasdaq 100 (^NDX) is a stock market index made up of 103 equity securities issued by 100 of the largest non-financial companies listed on the NASDAQ. It is a modified capitalization-weighted index. It is based on exchange, and it is not an index of U.S.-based companies.