Tuesday, April 4th, 2023
Don’t look now, but we’ve been in the midst of an actual market rally for the past two and a half weeks. Since March 16th, the Dow is +5%, the S&P 500 +5.7%, the Nasdaq +7.5% and the small-cap Russell 2000 +4%. Even dealing with the drama of destabilized regional banks and a Fed continually raising interest rates, the past 13 trading days have been overall a roaring success.
We tend not to look at things through rose-colored glasses these days, after multiple episodes of being slapped down by market realities in 2022 where the urge was to push equities higher. It would appear as if markets naturally want to buoy higher these days as well, having already priced-in to a certain extent a 50-basis-point interest rate hike (that didn’t happen) and bank failure contagion similar to what we saw in the financial crisis of 2008-09 (that hasn’t happened either, to date).
Pre-markets look headed back down to zero after up nearly +0.6% on the Nasdaq this morning. There’s really nothing to twist market participants’ understanding of what’s going on in the market, aside from analyst notes on Energy stocks and some on financial stability in Banking. We feel there is likely a cap to the upside trajectory, at least until Friday’s Employment Situation numbers come out. We’ll be looking for any breakdown in the labor market that might be beneficial toward bringing inflation down.
After today’s open, Factory Orders for February are out, with -0.5% expected on headline, better than the -1.6% posted a month ago. JOLTS data, also for February, is also expected around the same time later this morning. The Job Openings and Labor Turnover Survey is expected to display 10.5 open positions for the month — lower than the 10.8 million in the previous print and 11 million-plus we’d been seeing much of the past year. That said, it’s still an extraordinarily high level of unfilled jobs, which would render a potential collapse in monthly jobs totals at the end of this week less likely.
In any case, the Dow and S&P are riding a nice 7 of 8 days higher rally; the Nasdaq looks to get back on pace after finishing in the red yesterday.Year to date, the Nasdaq is still up more than +20%. In fact, after such a robust March, all four major indices are well into the green for 2023 — now slightly more than a quarter of the way through the year. Like we said, “don’t look now, but…”
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What Are the Limits of Our Current Market Rally?
Tuesday, April 4th, 2023
Don’t look now, but we’ve been in the midst of an actual market rally for the past two and a half weeks. Since March 16th, the Dow is +5%, the S&P 500 +5.7%, the Nasdaq +7.5% and the small-cap Russell 2000 +4%. Even dealing with the drama of destabilized regional banks and a Fed continually raising interest rates, the past 13 trading days have been overall a roaring success.
We tend not to look at things through rose-colored glasses these days, after multiple episodes of being slapped down by market realities in 2022 where the urge was to push equities higher. It would appear as if markets naturally want to buoy higher these days as well, having already priced-in to a certain extent a 50-basis-point interest rate hike (that didn’t happen) and bank failure contagion similar to what we saw in the financial crisis of 2008-09 (that hasn’t happened either, to date).
Pre-markets look headed back down to zero after up nearly +0.6% on the Nasdaq this morning. There’s really nothing to twist market participants’ understanding of what’s going on in the market, aside from analyst notes on Energy stocks and some on financial stability in Banking. We feel there is likely a cap to the upside trajectory, at least until Friday’s Employment Situation numbers come out. We’ll be looking for any breakdown in the labor market that might be beneficial toward bringing inflation down.
After today’s open, Factory Orders for February are out, with -0.5% expected on headline, better than the -1.6% posted a month ago. JOLTS data, also for February, is also expected around the same time later this morning. The Job Openings and Labor Turnover Survey is expected to display 10.5 open positions for the month — lower than the 10.8 million in the previous print and 11 million-plus we’d been seeing much of the past year. That said, it’s still an extraordinarily high level of unfilled jobs, which would render a potential collapse in monthly jobs totals at the end of this week less likely.
In any case, the Dow and S&P are riding a nice 7 of 8 days higher rally; the Nasdaq looks to get back on pace after finishing in the red yesterday.Year to date, the Nasdaq is still up more than +20%. In fact, after such a robust March, all four major indices are well into the green for 2023 — now slightly more than a quarter of the way through the year. Like we said, “don’t look now, but…”
Questions or comments about this article and/or its author? Click here>>