“The Bulls are in charge” — Paul Ebeling
Monday’s S&P 500 futures Vs fair value: +23.30. NAS Comp futures Vs fair value: +56.50.
What happened last week
The S&P 500 (+1.2%) set intraday and closing record highs Thursday, Topping the 4000 mark for the 1st time, in a broad-based advance. The NAS Comp (+1.8%) and Russell 2000 (+1.5%) outperformed the benchmark index with solid gains, while the DJIA (+0.5%) lagged, but rose modestly.
There was a confluence of positive developments Last Thursday.
To name a few, the ISM Manufacturing Index for March jumped to 64.7% from 60.8% in February for its 10th straight expansionary reading, 1st-of-the-month inflows helped drive equities higher and Treasury yields lower, and the mega-caps led.
The mega-cap leadership was represented in the outperformances of the S&P 500 information technology (+2.1%) and communication services (+2.1%) sectors, although the energy sector (+2.7%) advance the most. The defensive-oriented healthcare (-0.2%), consumer staples (-0.2%), and utilities (-0.02%) sectors closed lower.
The Philadelphia Semiconductor Index (+3.7%) was another pocket of strength.
Energy stocks drew support from higher oil prices following an OPEC+ policy meeting. The group agreed to cautiously increase output from May through July with Saudi Arabia easing on its extra 1-M BPD cut. WTI Crude Oil futures settled higher by 3.8%, or 2.22, at 61.41bbl.
The NAS 100 pasted the 50-Day EMA running up to the 50-Day SMA on the session high. In the end, the NAS 100 cleared the 50-Day EMA but did nor reach to the 50-day SMA.
The S&P 500 looked as if it was going to become the new market leader as it ran past the mid-March all-time high. It actually missed out on the all-time closing high by 2 pts.
What to expect this week
The upcoming corporate earnings season will offer investors insight on the sustainability of this Bull run that has taken stocks to all-time highs.
Evidence of strong economic and corporate growth should support investor confidence after a Quarter that saw solid stock gains.
History suggests stocks will keep driving this month, with the S&P 500 tallying its highest average gain in April out of any month over the past 20 yrs
Corporate results are due in earnest starting in mid-April and overall S&P 500 Q-1 earnings are expected to spike 24.2% from a year ago, according to Refinitiv IBES.
Have a healthy week, Keep the Faith!