SPX Moves Lower in its 13-day Channel after ADP Report and George, Bullard Comments...Oil Rises...Energy, Communication Services Lead Sectors...

© 2023

 

The SPX -44.87 opened lower after the ADP employment report and continued lower after Fed comments from George and Bullard.  The SPX remained like SPY, DIA and IWM in a 13-day trading range.

VIX moved higher.

Bullard indicated in a speech to the St. Louis CFA Society that the policy rate is not yet sufficiently restrictive and discussed

GDP growth has improved,

Labor market performance remains strong,

Inflation is too high but has declined recently,

Inflation expectations are relatively low,

2023 Disinflation prospects.

 

In my view, markets continue to temporarily overreact on an intraday basis to each speech, presentation, forum, panel, interview, essay, and other interaction in which Fed members participate.

There are nineteen members of the Fed including 12 regional bank presidents and seven members of the board of governors.  Last year James Bullard, the St. Louis Fed President, participated in at least 36 events.  If nineteen Fed members did the same there would be SIX HUNDRED EIGHTY-FOUR public interactions in a year that has 251 business days.  Each of those are observed by dozens or more news outlets, each with partial comments multiple times per day.

Are each of these interactions beyond the eight annual FOMC announcements and subsequent press conference, sharing new relevant policy information that adds to what the market knows?  Or are they redundant expressions of questionable value mixed with personal opinions?

James Bullard’s comments today included the observation: “Any opinions expressed here are my own and do not necessarily reflect those of the Federal Open Market Committee."

These interactions may represent opinion overload that ultimately reduces the Fed’s effectiveness in communicating policy and increases the potential for confusion and chaos in the financial markets, the media and the minds of public investors.

FWIW, Dave.

DXY, /CL, TLT and TNX closed higher, while GLD moved lower.

SPY down 4.38 at 379.38, on 76.9 million shares, below average volume, down on lower volume.

VIX up .45 at 22.46

QQQ down 4.16 at 261.58

CVX, MRK, VZ, DOW led the DJIA, 7 advancers, -17

LW, WDC, VLO, MPC led the SPX, 122 advancers

PDD, WBD, BKR, TMUS led the NDX, 24 advancers

The two-year trend term is up a little.  The one-year trend down.

Up:

Down:  DIA, IWM, SPY, QQQ,

Two of eleven sectors were higher on Thursday, led by XLE, XLC and XLF.

Advancers weakened on Thursday as decliners led 1,825 to 1,292 on the NYSE and led 2,783 to 1,811 on the NASDAQ.

The SPY MFC green line is pointed up at 20.1 and is short-term bullish.  SPY opened lower and closed lower.

Uptrend sectors:   XLV, XLP, XLB, XLI, XLF, XLE, XLU,

Neutral sectors:  XLRE, XLK, XLC,

Down trend sectors:  XLY,

The 6-month intermediate trend is sideways.  The ten-day trend is sideways.

3-month Intermediate Term Market Trend: Sideways

3-day Short Term Market Trend: Down a little

24 of 100 NDX stocks closed higher on Thursday

24 NDX stock are above their 30 DMA:   KHC, ROST, AZN, AVGO, ATVI, EXC, OKTA, ALGN, BKNG, META, SGEN, CMCSA, JD, PDD, PYPL, SBUX, EBAY, IDXX, ISRG, MU, NFLX, WBD, BKR, CHTR,

NDX Stocks to Watch on Friday:

Moving Above 30 DMA = 2

BKR, CHTR,

Moving Below 30 DMA = 6

ADBE, FISV, MNST, VRSK, WDAY, XEL,

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