Did you know? Between 1980-2019 75% of SP500 $SPY returns have come from dividends
Archives of “March 2021” month
rssHere’s a forecast for S&P500 at 4,100 as a ‘base case’ this year (4,600 in most bullish scenario)
Scanning some research notes, this one to cheer up the stock market bulls after a down day.
Via RBC on the S&P500 (in summary):
- Our 2021 S&P 500 target of 4.100 is our base case. It is roughly the median of 15 upside scenarios that we examined. If our call proves too conservative, our analysis suggests that the S&P 500 could trade as high as 4,600 for a +20% full year gain – the most bullish scenarios we examined came close to this level.
- Among the eight downside scenarios we examined, which articulate our bear case for full year or interim downside if momentum breaks lower, several point to a pullback to the 3600 / 3700 area (mid single digit drop in percentage terms depending on the starting point used) or to -3,200 (mid to high teens dip in percentage terms depending on starting point).
An ugly day for the NASDAQ. Major indices close at lows
Dow turns negative at the close
It was an ugly day for the NASDAQ index. It fell 2% on the day on a decline of 265.8 points. The S&P index and Dow were down more modestly but both closed at the session lows.
The declines today cannot be blamed on yields moving higher. The treasury curve is lower across the board with the 10 year down 1.75 basis points. The 30 year is down -2.3 basis points.
The Dow, S&P, and NASDAQ have 2 day losing streaks. The Russell 2000 is lower for the 3rd straight day.
A look at the closing levels is showing:
- S&P index fell -21.38 points or -0.55% at 3889.14
- Nasdaq index fell -265.80 points or -2.01% at 12961.89
- Dow fell -3.09 points or -0.01% at 32420.06
- Russell 2000 fell -2.35% or -51.42 points at 2134.27
Big losers today included:
- Gamestop, -33.66% to $120.57. The company announced earnings after the close yesterday
- Koss, -21.06%
- Nio, -10.25%
- Bed Bath and beyond, -8.08%
- Zoom -7.25%
- Chewy, -6.91%
- Palantir, -5.91%
- Snowflake, -5.11%
- Beyond Meat, -5.0%
- Goodrx, -4.95%
- Teslas, -4.82%
- DoorDash, -4.73%
- Crowdstrike, -4.67%
- Airbnb, -4.41%
- Square, -4.33%
All those stocks are grouped as some of the high flying stocks of 2020.
Looking at some of the big cap losers:
- Facebook, -2.93%
- Netflix, -2.68%
- Salesforce, -2.55%
- Intel, -2.33%
- Disney, -2.1%
- Apple, -2.01%
- Amazon, -1.51%
- Microsoft, -0.91%
- Boeing, -0.87%
- Alphabet, -0.35%
Winners today:
- Schlumberger, +2.81%
- Chevron, +2.74%
- Exxon Mobil, +2.06%
- Stryker, +1.86%
- DuPont, +1.82%
- Honeywell, +1.77%
- American Express, +1.73%
- Caterpillar, +1.36%
- Charles Schwab, +1.2%
- Home Depot, +1.05%
- Corning, +0.95%
- General Dynamics, +0.9%
- Boston scientific, +0.89%
- J.P. Morgan, +0.77%
Thought For A DAY
EURUSD continues to waffle below the 200 day MA
EURUSD trades in a 23 up and down range in the NA session
The EURUSD has remained in a 23 pip trading range during the North American session. The low came in at 1.1838. That was just above the London session low of 1.18117. Both are below the old cycle low for 2021 at 1.1835 from March 9.
The high in the New York session reached 1.18385. That did take the price back above the March 9 swing low but momentum could not be sustained. The price moved back down. We currently trade at 1.1822. The sellers remain in control.
Late yesterday, the price fell below its 200 day moving average currently at 1.1852. The Asian session high stalled right at that level. So the price is likely to close below the 200 day moving average for the 2nd consecutive day (but further away from the MA today). You have to go back to May 26, 2020 to have the pair close below the 200 day MA on back-to-back days (the MA was much lower at 1.1009 at the time).
Seller are more in control below 1.1835 (swing low from March 9), and the 200 day MA at 1.1852.
Efforts to un-jam Suez canal ship suspended until tomorrow
The ship remains stuck
Every hour it’s stuck in there, you can imagine how many more ships and deliveries back up.
Officials sounded confident they could get it done but watching those excavators and bulldozers trying to dig it out is worrisome.
US 5-year note sale coming up
US to sell $61 billion in 5-year notes
At the top of the hour, the US will raise $61 billion in a 5-year Treasury auction. This is a new sale, not a reopening and is trading at 0.835%/0.845% on the bid/ask in the when issued market.
Last month, the sale of 5s followed by 7s the next day caused a puke out in bonds that reverberated through markets. The WI today is about 21 bps above those levels, which wipes out quite a bit of the return for last month’s buyers. Why not average down?
In any case, there are some real jitters ahead of this sale. Results will be out just after the top of the hour.
OPEC+ likely to roll over production – report
OPEC+ is ‘likely’ to make a similar decision to the last meeting on April 1, according to 4 Reuters sources.
They say some had hoped to reverse cuts but more covid and lockdowns are delaying those plans.
The report also notes that Iran is increasing shipments and defying US sanctions.
WTI is at the highs of the day, up $2.92 to $60.72.
WTI rebounds nearly 5% from six-week low
Oil storms higher
Crude is having a bounce back day.
WTI tumbled to a six-week low yesterday in a 7% decline but it’s recovered most of the decline today, rising by $2.67 to $60.40, or 5%.
Technically, it breached the 55-day moving average yesterday for the first time since November but the strong rebound today despite a slight dip below that and the mid-Feb low is a positive sign. To generate any real kind of momentum though, or even to confirm a period of consolidation, it needs to get back above $61.90.
On the fundamental side, US weekly inventories were higher than anticipated but the small dip that caused in oil prices was quickly reversed. The ship blocking the Suez canal is backing up oil traffic but is expected to be cleared today or tomorrow.
Looking further out, the next OPEC meeting is coming quickly on March 31 and April 1. The latest dips in oil prices will likely make ministers more cautious and ensure an extension or the current policy, or only a small increase in supply in May.
EIA weekly US oil inventories +1912K vs 1350K expected
Weekly US oil inventory data
- Prior was 2396K
- Gasoline 204K vs 1250K expected
- Distillates +3806K vs -450K expected
- Refinery utilization +5.5% vs +2.6% expected
- Production estimate 11 mbpd vs 10.9 mbpd prior
API data from late yesterday:
- Crude +2927K
- Gasoline -3728K
- Distillates +246K
WTI crude is about 15-cents lower on the headline to $59.55. Refineries really ramped up production last week as they play catch-up to on the Feb outages ahead of what looks to be a strong driving season. We’re up to 14.4 mbpd from 14.8 mbpd before the freeze.
There was a big jump at PADD 3 of 5385K, which is the gulf coast and suggests imports.