Things you need to know.
- Bonds down, Yields Up, Stocks Down
- Transports celebrate the re-opening of the Suez Canal
- Joey to unveil part 1 of his Economic Plan in Pittsburgh
- OPEC to hold the line on ‘supply discipline’
- It is the end of the 1st qtr.
- Try the Lollipop Lambchops
And so the story continues…..The Dow lost 104 pts or 0.31%, the S&P gave up 12 pts or 0.32% and the Nasdaq lost 14 pts or 0.11%, the Russell bucked the trend and added 37 pts or 1.72% – making up just a piece of what it lost on Monday….when it got slammed ending lower by 2.38%……the Transports added 200 pts or 1.37% and we can thank the opening up of the Suez Canal as the driver behind that move…..Just the sheer excitement that ships were going to once again navigate their way through the canal….caused the algo’s to go ‘all in’. 10 Yr. Treasuries peaked at 1.77% as investors continued to sell bonds and that held stocks in place as we all await Joey’s press conference in Pittsburgh ……
Cathie Wood’s ARKK ETF – the proxy for everything ‘disruptive’ also bucked the trend after testing and finding continued support at the 200 dma trendline…. which means that this stock – representing the best of tech disruptors – is now down a whopping 31% since mid-February…with individual names in the portfolio down even more…. while others a bit less. It seems to me that she is starting to see some bargain hunters picking away at this name. Now, if it should fail to hold the trendline at 106.88 – we could see a swift move down to the $88 level…. or another 16% from here…and if it does hold then intermediate trendline resistance is the next stop at $127 representing a 19% move higher…leaving it still in correction territory.
Talk of a brighter outlook coupled with concerns of higher inflation driving the action and all the talk of what ‘the plan’ is causing investors to remain a bit cautious…. notice I did not say anxious – I said cautious….
Joey is expected to map out part 1 of an infrastructure plan aptly named the American Jobs Plan – this one focused on roads, bridges, airports, broadband, electrical grids, lead pipes, weatherization of commercial buildings, elder care, housing and manufacturing – that he says will cost $2 trillion – while other estimates suggest it is closer to $3 trillion (if Bernie and Lizzy get their way) and it is to be paid for by ‘bumping’ up corporate taxes from 21% to 28% and by introducing a new idea – a minimum tax on global corporate earnings….don’t worry – higher personal income taxes are coming….they will be introduced in ‘part 2’ of the package. He has chosen Pittsburgh, PA – because it embodies the re-birth of the ‘working class’ city that has seen an ‘old rusty’ manufacturing hub reborn as new industries like healthcare and technology redefine the cityscape.
Now remember – this is on top of the $1.9 trillion relief package – known as the American Rescue Plan that they signed into law only weeks ago and is nestled in between that and the ‘American Social Infrastructure’ plan that will focus on childcare, home care, pre-school and early education, more health care funding, and free college tuition (at community colleges). And all of this has yet to be announced because the details are still being worked out but is rumored to have a price tag of another $2 trillion. Which means that the Dems have managed to spend $6.9 trillion dollars before his first 100 days in the oval office. None of it with bi-partisan support…which flies in the face of one of Joey’s campaign promises – which was to work with Republicans to gain broad support.
In any event – we continue to see energy, financials, consumer discretionary and industrials leading the way higher….as asset managers are playing the ‘economic rebound’ idea….and speaking of rebounds…. JETS surged higher – rising by 2.45% as the idea of travel opens again and Joey’s infrastructure bill promises to rebuild some of the country’s aging airports – making airport travel elegant again. Technology, Utilities and Healthcare were among the weakest groups yesterday….and the weakest groups ytd.
This morning US futures are churning in place – the Dow down 23 pts, the S&P off 1 pt. the Nasdaq up 22 pts and the Russell ahead by 6 pts. All this as we await the latest macro data and Joey’s version of ‘Make America Great Again’…. At 7 am – we will get mortgage apps, at 8:15 we will get the ADP employment report – which is expected to show an increase of 550k jobs….and at 9:45 am we will get the MNI Chicago PMI report – exp of 61 – putting that city solidly in expansion mode. And at 10 am – Pending Home Sales – expected to show a loss of 3% m/m.
Today is also the quarter end….so expect all kinds of re-shuffling and outsized volumes as asset managers adjust into the end of month, end of quarter reporting period. And that means that tomorrow is April 1st and the start of a new quarter and month – which could mean that we could see a surge of buying in a range of beaten down names as asset managers re-think the outlook and prepare for the 1st quarter earnings season to begin in earnest on April 14th and takes us thru mid-May….
European markets are lower…Eurozone inflation and German Unemployment data to be released later this morning…. Investors there keeping an eye on the latest US macro data and the Biden press conference and end of month and quarter trading driving the action. At 5 am the FTSE -0.39%, CAC 40 -0.12%, DAX -0.11%, EUROSTOXX -0.15%, SPAIN +0.44% and ITALY +0.46%.
Oil – is up 17 cts at $60.73/barrel……OPEC to meet tomorrow and investors and traders expect them to extend their current supply cuts into end of May…. the official word is that “OPEC is going to show supply discipline” – Supply discipline – is that how you rationalize production cuts created to force oil prices higher? Is that what Joey did here? Force US producers into supply discipline? All I know is that oil is now solidly in the $55/$65 range with even higher prices expected as we go from spring to summer….and the world wakes up…. Gas at the pump is already up more than a buck adding just another tax to the American wallet. Trendline support is at $59.25 with resistance at $65.50 for now….
Bitcoin – is trading at $58,800. Ethereum is trading at $1812.
The S&P closed at 3958 after trading in an even tighter range of 3944/3968. In all of this – we remain closer to the all-time highs than not…. the S&P is still up 5.6% ytd and does not seem to want to correct at all…. near term resistance continues to be at the 3975 level…but the wider normal trading channel is now 3841/4040….
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Take Good Care
Chief Market Strategist, Consultant
Simple to make and so good. All you need are those and an arugula salad mixed with cherry tomatoes, red onion, cucumber, and feta cheese. It is a 20 min meal.
For this you need a doz lollipop lambchops, Adobo seasoning,
Turn the oven to broil.
Place the lambchops on a baking sheet and season with adobo on both sides. Let them rest for 10 mins – and make your salad.
Now place the chops in the oven and broil – maybe 8 mins/side…. You want them to be crispy….so good.
Serve them casually on a platter with the salad on the side. Have a glass of wine, soft music, and boom…it has done.