Summary: We have our inflation data now as Consumer Price Indexes for March were released today. Large-cap stocks declined while small caps advanced.
Notes
Ideas always welcome in the comments. Errors will be amended as comments on TradingView or corrected inline in my blog.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Tuesday, April 12, 2022
Facts: -0.30%, Volume higher, Closing Range: 15%, Body: 58% Red Good: Not much, maybe higher high Bad: Closing range, lower low, higher volume on decline Highs/Lows: Higher high, Lower low Candle: Outside day, long upper wick over red body Advance/Decline: 0.56, almost two declining stocks for every advancing stock Indexes: SPX (-0.34%), DJI (-0.26%), RUT (+0.33%), VIX (-0.45%) Sector List: Energy (XLE +1.66%) and Utilities (XLU +0.38%) at the top. Health (XLV -0.97%) and Financials (XLF -1.09%) at the bottom.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Overview
We have our inflation data now as Consumer Price Indexes for March were released today. Large-cap stocks declined while small caps advanced.
The Nasdaq declined by -0.30%. Volume was higher than the previous day. The closing range of 15% comes under a 58% red body that is topped by a long upper wick. The upper wick formed in an early rally that failed and turned into distribution the rest of the day. A short lower wick formed as the index recovered some losses late in the session. There were almost two declining stocks for every advancing stock.
The Russell 2000 (RUT) rallied +2.38% in the morning but gave back the gains to end the day with a +0.33% advance. The S&P 500 (SPX) declined by -0.34%. The Dow Jones Industrial Average (DJI) lost -0.26%. The VIX Volatility Index declined by -0.45%.
Five of the eleven S&P 500 sectors gained today, dominated by cyclical sectors. Energy (XLE +1.66%) and Utilities (XLU +0.38%) were the best two sectors. Health (XLV -0.97%) and Financials (XLF -1.09%) had the biggest declines.
As expected, soaring oil prices put the Consumer Price Index data at its highest year-over-year growth since 1981. However, Core CPI, which excludes oil and food items, rose less than expected. Could this be the start of a turning point in inflation?
The US Dollar index (DXY) continued its rise, climbing by +0.34% today. The 30y Treasury Yield advanced just slightly, but the 10y and 2y yields declined. High Yield (HYG) and Investment Grade (LQD) Corporate Bond prices rose. Silver and Gold continued to rise. Brent Oil briefly topped $105 again but ended just below at $104.70.
The put/call ratio (PCCE) declined to 0.710. The CNN Fear & Greed Index remains in the Fear range.
Checking in on the big six mega-caps, only Tesla (TSLA) and Apple (AAPL) gained today, advancing +1.13% and +1.15%. Nvidia (NVDA) had the biggest decline, losing -1.88%.
Exxon Mobile (XOM), Chevron (CVX), and Shell (SHEL) topped the mega-cap list with the first two gaining over 2% each. Danaher Corporation just barely held onto its mega-cap status (200b market cap) after declining by -3.57% today and ending up at the bottom of the list.
There were some decent gains in the Daily Update Growth List, but most of the list declined. Cloudflare (NET) and CrowdStrike (CRWD) topped the list with +3.90% and +3.19% gains. The biggest loser on the list was Twitter (TWTR) which fell by -5.38%, giving back some of its recent advances.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Looking ahead
Tomorrow will bring the Producer Price Index data for March which is another take on inflation. Produce Prices are forward-looking as rising prices are passed along to consumers in the future.
Tomorrow kicks off earnings season for big banks as JPMorgan (JPM) and BlackRock (BLK) report. In addition, Fastenal (FAST), Delta Air Lines (DAL), and Bed Bath & Beyond (BBBY) will report.
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The outside day for the Nasdaq did not test any moving averages or support/resistance areas.
The trend line from the 3/29 high and the five-day trend line point to a -0.46% decline.
If the one-day trend continues, that would mean a -2.87% decline for Wednesday.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up
The inflation data is out there and is one less thing for investors to fret over. The producer price index data will be an interesting number to watch tomorrow. The February index was expected to be 0.6% but came in at 0.2%. March is forecast for 0.5%. Another surprise that puts PPI nearer to 0.25% would be good news.