DJIA: 52-wk -0.01% YTD: +2.00% Wkly: -0.23%
S&P 500: 52-wk: -3.24% YTD: +7.66% Wkly: -0.10%
NASDAQ: 52-wk: +5.97% +15.34% Wkly: -0.42%
INVESCO S&P 500 HIGH BETA ETF: 52- wk: -4.90% YTD: +.2.60% Wkly: +0.19%
After rallying 7% to start the year, the S&P index can't decide what to do. Three weeks into the month of April, the S&P has risen just 0.6% which, if the trend holds, would be its smallest monthly gain since May 2022.
What's more, the Nasdaq 100 has had a range of just 2.9 percent so far in April.
"We think it speaks to the uncertainty across the market," writes Mizuho Securities' Daniel O'Regan.
Bond yields held relatively steady. The yield on the 10-year Treasury, which influences mortgage rates and other loans, rose to 3.56% from 3.54% late Thursday.
Meanwhile, an academic paper attempts to quantify some of recent comments about 0DTE option traders. A paper from researchers at the University of Muenster asserts that zero-dated options buyers in SPX lose an average of $358,000 a day. This is nearly double what they lost a year ago, when fewer daily options existed.
Economists have become more skeptical about inflation in 2023: According to the Wall Street Journal's latest survey of economists, the average expectation is for inflation (as measured by the consumer price index) to hit 3.53% year-over-year by December. Just three months ago, the average expectation was for a 3.1% y-o-y CPI increase.
Tax receipts this year will be critical. Low receipts will put debt ceiling possibly as early as June and larger than expected receipts, can run them out to September. On another point, the bulls are benefitting from some last minute tax swapping money into IRA’s to then buy stocks.
The rally has made stocks far more expensive than they were at the start of the year with the S&P now trading at 18.3 times forward earnings, up from 16.7%.
There are tons of earnings reports due this week and several economic reports as well. FactSet expect profits to contract by 6.3% for companies in the S&P 500. Proceed with caution!
Stay nimble,
Richie Naso
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