Market Insights

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Sizing Up the S&P 500

• S&P 500 in midst of first negative month since October
• Prices break trendline, rising 21-day exponential moving average
• Rate of change, Wilder’s RSI no longer reflecting positive momentum
• 4/8 bearish outside day potentially similar to 7/27, followed by a drop four days later
• TradeStation data: 8 index members hit 52-week lows on Wednesday vs 3 highs. First time since 11/2 that lows outnumber highs.
• Intermarket:
  • 10-year Treasury yield highest since November, above key level at 4.324%
  • Euro at risk of breaking December low

Key News

• March CPI (headline and core) +0.4% vs +0.3% estimate. Shelter, insurance, apparel, medical costs increase.
  • 3rd month with core higher than expected
• March non-farm payrolls +303K vs 200K estimate. Unemployment 3.8% vs 3.9% estimate.
• Potential negatives for Treasuries:
  • U.S. Treasury reportedly has worst 10-year auction since November 2022 (according to BMO). Dealers kept 24% of supply vs 16% average.
  • March fiscal deficit $236bln vs $209bln estimate as interest payments rise.
  • “Vicious cycle” of higher rates → wider deficits → more Treasury supply → higher rates?
• Insurance rates to keep rising because of higher costs and losses: David Sampson, CEO of American Property Casualty Insurance Association tells CNBC
• Fed minutes show less confidence that inflation is moderating
• CNBC: “Supercore” inflation (ex-shelter) potentially running near 8% on insurance, tax costs

Signals Scan

• Morgan Stanley (MS) potentially trapped at December high
• Citigroup (C) and Bank of America (BAC) at risk of breaking 21-day EMAs
• HP (HPQ) breaking 50-, 200-day MAs
• CVS Health (CVS) breaking 200-day MA
• Coca-Cola (KO) at risk of breaking 200-day MA
• REITs under 200-day MAs: AMT, SBAC, CCI, KIM, O
• SNAP “death cross”
• YELP hitting potential resistance at falling 50-day MA

Upcoming Events

• Fri 4/12: Earnings season kickoff: JPM, C, WFC
  • Earnings: JPM, C, WFC
• Mon 4/15: Retail sales
  • Earnings: GS
• Tues 4/16: Housing starts / building permits
  • Earnings: BAC, MS, UNH, JNJ, UAL
• Wed 4/17: Crude oil inventories
  • Earnings: USB,
• Thu 4/18: Jobless claims
  • Earnings: TSM, NFLX

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