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Market Eyes Trend Shift After Latest Inflation Reports
Happy St. Patricks Day. Hopefully your luck will be better than any executive at Boeing.
MARKET RECAP
Market Breaks Down after Inflation Continues to Come in Hot
The big news was this week was the higher than expected CPI report Tuesday and PPI report Thursday. The market didn’t seem to care on Tuesday as SPY ripped higher and ending up closing at another all-time high.
When the PPI report came in Thursday higher than expected, thats when things started getting ugly. The only winners are the companies who actually make money, mainly the megacaps who have a ton of cash and can benefit from high interest rates. On the other hand, most smaller companies got hammered with the Russell 2000 (which tracks small caps) down 1.7% on Thursday. It is incredibly tough for any start-up and small cap stock to gain in a this high interest rate environment. These high inflation reports are going to make it extremely difficult for the fed to make any interest rate cuts this year, let alone the seven cuts that the market was optimistic about not too long ago.
SPY closed below the 8 ema, showing the first signs of a technical breakdown after this incredible bull run we have been on since October. For now we barely hold onto the 21 ema, but next week will be big to determine what direction the market will be heading in the near future.
TRENDWATCH
Nvidia Closes Below the 8 EMA
NVDA, which has been the biggest catalyst for keeping the market on its feet the last few months is finally showing signs of weakness as it teetered with the 8 ema all week before closing just below on Friday. I am going to keep my eye on this chart to see if it can re-gain the 8 ema or break down lower to the 21 ema. This trend shift could be big for the overall market as I am not sure what else will keep the overall market afloat for the short term future.
Last Weeks Trend: Google
Last week I pointed out GOOGL in my trend watch section as it had just bounced off the 200 ma. The stock had an incredible resurgence seeing large gains 4 of the 5 days, crossing over the 8 and 21 ema, eventually closing right at the 50 ma.
IN THE NEWS
Source: Christopher Lyzcen / Shutterstock.com
🚗 Tesla got a huge downgrade from Wells Fargo this week, who slashed their price target to $125/share from $200/share. This caused the stock to have another rough week.
🏞️ Adobe shares plummeted nearly 14% Friday after a weak performance outlook, causing analysts to cut price targets.
✈️ Boeing continues to face extreme criticism in recent safety allegations.
UPCOMING WEEK
Fed Interest Rate Decision
This week all eyes will be pointed to the Fed Interest Rate decision on Wednesday, as investors hope to get clarity on the direction of the economy.