Market at a Glance - 3/28/2024
By: Christopher Mistal
March 28, 2024
Please take a moment and register for our member’s only webinar, April 2024 Outlook and Update on Wednesday April 3, 2024, at 2:00 PM EDT here:
Please join us for an Almanac Investor Member’s Only discussion of recent market action with time for Q & A at the end. Jeff and Chris will cover their outlook for April, review the Tactical Seasonal Switching Strategy ETF, Sector Rotation ETF, and Stock Portfolio holdings and trades. We will also share our assessments of the Fed, inflation, the “Best Months” as well as relevant updates to seasonals now in play.
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Market at a Glance
3/28/2024: Dow 39807.37 | S&P 5254.35 | NASDAQ 16379.46 | Russell 2K 2124.55 | NYSE 18312.67 | Value Line Arith 10551.11
Seasonal: Bullish. April is #1 DJIA month by average performance since 1950, 2nd best S&P 500 month and 4th best NASDAQ (since 1971). In election years, performance and rank softens slightly, 3rd best DJIA and S&P 500 month, 6th for NASDAQ, but remains bullish. April is the last month of DJIA and S&P 500 “Best Six Months.” NASDAQ’s Best Months run through June. Our Seasonal MACD Sell can trigger anytime on or after April 1. Members will be emailed after the close when Seasonal Sell triggers.
Fundamental: Holding Up. As of the March 26 update, the Atlanta Fed’s GDPNow estimate stands at 2.1% for Q1. This is a slowdown from Q4 2023, but still a reasonably solid number that is not too hot. Employment data is resilient with unemployment at 3.9% and 275,000 new jobs added in February. March’s employment numbers are anticipated to be good with no change in the unemployment rate. Corporate earnings forecasts are improving. Inflation has been warmer than forecast and a return to the Fed’s stated 2% target does not appear likely until the second half of 2024.
Technical: Stretched. Five straight months of gains with continued new all-time closing highs. Thus far dips have been brief and shallow, but momentum does appear to be slowing. MACD indicators applied to DJIA, S&P 500 and NASDAQ have been trending sideways to lower confirming the slowing pace of gains. Other technical indicators hover around or at overbought levels depending upon index. Additional gains are possible, but the bulk of the seasonal move is likely done.
Monetary: 5.25 – 5.50%. After the most recent meeting, the Fed appears to be on a path to begin cutting at their June meeting despite recent inflation data that did not meet expectations. Either the Fed views the recent pickup in inflation as another transitory event or they are beginning to move the goalposts for their official target as our forecasts suggest 2% is further away now. Nonetheless, the market currently appears satisfied with the Fed. Any disappointment could be the catalyst for some typical, seasonal weakness in late Q2 or Q3.
Sentiment: Cautious. According to Investor’s Intelligence Advisors Sentiment survey Bullish advisors stand at 60.6%. Correction advisors are at 24.2% while Bearish advisors numbered 15.2% as of their March 27 release. High levels of bullish sentiment have persisted for months now. This is not unusual as market tops tend to develop over time, weeks to months not days.