Week 09 Recap
The Week ended March 3 stocks bounced back after their worst weekly drop in 2 months, with energy and materials leading the gains, and communication services boosted by Meta Platforms’ rise. However, utilities stocks didn’t perform as well. The low trading volume throughout the week was likely due to a lack of significant market drivers. Additionally, the S&P 500 Index staying above its 200-day moving average, a key indicator for technical analysts and traders, helped to reinforce positive sentiment.
Recovery and stabilization basically happened in the second half of the week. Tn between the debt market and most of stock market segments sowed some fear sentiment.
(S&P 500) closed at 4045 (+75bp). The Nasdaq Composite index has closed at 11689 (+294bp).
S&P 500 weekly candles, SMA 50 (red) , SMA 200 (Green)
The market appears to have stabilized and the downward trend has found some support, although this does not necessarily indicate a pivot.
Numbers
| Index | Closed at | Week Change | YTD % |
|---|---|---|---|
| S&P 500 | 4045 | +75 | 5.37% |
| Dow Jones Industrial Average | 33390 | +574 | 0.74% |
| Nasdaq Composite | 111689 | +294 | 11.68% |
| US10Y | 3,956 | -0.66% | 8.01% |
Bullish sentiment
- China awakes
China’s manufacturing PMI rose to 52.6 in February, the highest level since April 2012, due to an increase in domestic activity. Production and new orders were strong, but raw materials remained in contraction. The non-manufacturing PMI also increased to 56.3. Both indexes exceeded economists’ expectations. Additionally, the private Caixin/S&P Global manufacturing survey returned to growth, marking its first expansion in seven months.
China’s top 100 developers saw a 14.9% increase in new home sales, ending a 19-month decline, due to the recovery of demand after the government lifted its zero-COVID policy and implemented measures to support the property sector at the end of 2022. This has resulted in the first year-on-year growth in the real estate sector, which contributes almost a quarter of China’s economy, since July 2021.
Bearish Indicator
- Money Supply is declining every month.
- Geopolitical problems
- The 10-year U.S. Treasury bond’s yield closed above 4.00% on Thursday for the first time in four months
- The 2-year note’s yield climbed as high as 4.94% on Thursday—the highest since 2007.
- New real estate loans to private households and self-employed people in Germany plunged to their lowest level since 2011. The volume of new loans for construction by German banks fell 43 percent year-on-year to 13.5 billion euros (14.6 billion U.S. dollars)
- Companies in the S&P 500 posted an average earnings decline of 4.9% over the same quarter a year earlier
Outlook (The week ahead)
The market seem to cool down and stabilize. Fear & Greed is neutral at 55. Fed seem continue to play the major role, please watch the Bonds markets.
Next week to be aware of
| Monday | Tuesday | Wednesday | Thursday | Friday |
|---|---|---|---|---|
| . | Consumer credit by Fed | ADP National Employment Report | Weekly unemployment claims | Treasury budget |
| . | Fed Chair Powell Testimony | Fed Chair Powell Testimony |
Next week’s most significant topic could be the jobs report, as Federal Reserve governor Christopher Waller cautioned that interest rates may need to be increased beyond anticipated levels if economic data indicates high inflation. Additionally, investors will closely monitor Treasury yields, particularly the 10-year Treasury note, which recently approached the 4% level.
Dividends predictions
Companies forecast to boost their quarterly dividend payouts:
| Company | Current div | Predicted div |
|---|---|---|
| Oracle (ORCL) | $0.32 | $0.38 |
| DICK’S Sporting Goods (DKS) | $0.4875 | $0.5375 |
| Qualcomm (QCOM) | $0.75 | $0.81 |
| General Dynamics (GD) | $1.26 | $1.36 |
| American Tower (AMT) | $1.56 | $1.58 |
Interesting tickers
Stocks to watch out for in the next weeks:
| Symbol | price level | Comment |
|---|---|---|
| ZIM | close to $17 | |
| AAP | $138 | Signs of support at this level. But don’t rush it’s not confirmed to be strong. |
| DDOG | $67 | Below this becomes attractive. |
| LUMN | $3 | Good pricing, but can still go down short term. |
| VZ | $36-37 | Good level for entry or short put strategy |
| PYPL | $72 | Below this level becomes interesting |
| ZM | $66 | Below this level becomes interesting |
Still most economic sectors are overpriced at the moment.
Please keep in mind This is not investment advice!
Stay careful! Happy investments!