Jim’s Notes – NASDAQ & SP500 Hit New Highs

Moving the Market – June 17th

The markets made another solid move to the upside on Monday with the broad index hitting new highs again. Void of any news investors were left to their own beliefs. The NASDAQ, QQQ, SOXX, and SPY moved higher for the day. The consumer discretionary sector led the upside along with technology showing more breadth in the move. The New York Empire PMI ‘surprised’ by not being as bad as expected. For June the number was -6.0 versus -10 expected versus -15.6 prior. It was the highest reading in four months. A lower negative number brings much rejoicing (joke). All said it was the best number in the last six months. The dollar was lower, interest rates were higher at 4.27%, and the NASDAQ closed at a new high. The dominant talk on the street was again about the Fed. The Fed was also out in force talking the same rhetoric as well. There is more planned for the balance of the week. Breadth is still on the table as an issue but the move Monday did show some signs of hope. There is still plenty of work to do on the charts albeit. IWM moved above $199.45 and looking for a follow-through. XLY moved back above $178 to confirm a break of the downtrend from the February highs. XLI and XLP held key support lines and bounced. XLF found some support at $40.40. IYR and XLU were the laggards on the day thanks to higher interest rates. Solid start to the week. Retail Sales are due on Tuesday for May with an expectation of 0.3% growth versus 0% prior. It will be released prior to the open and could set the tone for the day. Manage your risk and remain disciplined.

The major indexes closed higher on the day with more breadth from small caps and consumer sectors. The volume was above average as the overall sentiment was positive. The activity started flat and built momentum throughout the day with some giveback into the close. Monday the NASDAQ closed up 0.9%, DIA was up 0.5%, and the SP500 was up 0.7%. Overall positive activity on the day. The SOXX was up 1.5%. Small Caps (Russell 2000) were up 0.8%. The ten-year treasury yield was 4.27% up 6 bps and TLT was down 1% for the day. Crude Oil (USO) was up 2.2%. (UGA) was up 1.8%. Natural gas (UNG) was down 3.5%. The dollar was down 0.2%. Plenty to deal with moving forward as we manage our money and emotions relative to the current environment.

Tuesday Outlook: Retail sales data out prior to the open will offer some insight to the consumer. Need to continue to see the breadth widen as follow through to Monday. What are we watching? 1) The dollar’s response to the data. 2) Interest rates moved to 4.27% with an uptick in rates. 3) Crude oil bounced back above $80… what is the trade here? 4) Natural gas remains volatile down 10.4% in the last four days. 5) DBA is showing some volatility as commodities overall look for direction. 6) Mega caps leading… rewarding the leaders. 7) Do small caps move higher? Taking what is offered and balancing the risk.

The chart below shows the breadth issue for the SP500 sectors compared from the beginning of the current leg higher that started in April. Technology sector is the only one to outperform the index…

Headlines Worthy of Note:

Social Media should come with a warning label Surgeon General states. The belief is it is harmful to young people’s health. The need to control everything is a growing trend.

The S&P 500 Index gains in 2024 are almost entirely from five stocks. As we know technology stocks are carrying the markets higher, but this stat is very eye-opening when you put it in perspective. It has been a stock pickers market overall.

UBS upgrades BBY raises price target. The restructuring efforts are paying off and are expected to show up in the bottom line in quarters ahead.

Quote of the Day: “A person will sometimes devote all his life to the development of one part of his body – the wishbone.” — Robert Frost.

Hot Topics

Jim's Notes latest update directly to your inbox!

Please enable JavaScript in your browser to complete this form.
Scroll to Top