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Tag: S&P 500

  • Most S&P 500 Stocks No Longer Trade Above 50-Day Average: Healthy Pullback Or Is The Bull Market Over?

    Most S&P 500 Stocks No Longer Trade Above 50-Day Average: Healthy Pullback Or Is The Bull Market Over?

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    Most S&P 500 Stocks No Longer Trade Above 50-Day Average: Healthy Pullback Or Is The Bull Market Over?

    For the first time since early November 2023, less than 30% of S&P 500 stocks are trading above their 50-day moving average — a clear indicator of the current poor market’s breadth.

    This significant drop from the 85% observed in late March and 92% at the beginning of January highlights a dramatic reversal in market dynamics.

    The 50-day moving average is often seen as a barometer for the short-term health of stocks. Falling below this level en masse suggests that a broad swath of the market is facing downward pressure.

    This shift comes amid escalating geopolitical tensions in the Middle East and renewed concerns over inflation, which have collectively nudged traders towards a more guarded stance in April.

    On Wednesday, the SPDR S&P 500 ETF Trust (NYSE:SPY) closed 0.3% lower, marking its fourth straight session in the red. That’s the longest losing streak since early January.

    Chart: Less Than 30% of S&P 500 Stocks Trade Below 50-Day Moving Average

    Inflation Concerns

    March saw inflation rates rise to 3.5%, overcoming economist expectations and continuing a three-month trend of increases.

    “The recent data have clearly not given us greater confidence and instead indicate that it is likely to take longer than expected to achieve that confidence,” Powell said Wednesday.

    That sounded like an official delay to rate-cut hopes. With inflation proving stubborn, the outlook for interest rates has shifted significantly.

    Futures markets are now anticipating roughly 40 basis points in cuts by the end of the year, or less two quarter-percentage points Fed rate cuts.

    S&P 500 Outlook: Heading To A Correction?

    Investment analysts are closely watching these market developments.

    Veteran investor Ed Yardeni recently predicted a potential retest of the S&P 500’s 200-day moving average around the 4700 level, which would represent “a classic 10% correction.”

    “The S&P 500 is experiencing its first real bout of volatility this year,” said Adam Turnquist, chief technical strategist for LPL Financial.

    The index has seen a 3.9% decline in April, which has begun to “create some technical damage.” Notably, the S&P 500 has breached its shorter-term uptrend and fallen below its “20- and 50-day moving average (dma),” positioning the 5,000-point mark as the next critical support level.

    Turnquist highlighted that longer-term breadth indicators are more robust, with “nearly 70% of S&P 500 constituents remain above their 200-dma.”

    “The lack of major damage to longer-term breadth across the offensive sectors suggests bullish leadership is still on stable ground despite the recent shakeout,” he added.

    Stephen Suttmeier, technical strategist at Bank of America, highlighted that 12 consecutive months of positive year-over-year returns for the S&P 500 could portend well for the future.

    Data suggests that if this trend continues for at least 20 months, the index could see a rise of up to 17.1% (6,150 points) by November 2025.

    However, Suttmeier warned of near-term risks. The S&P 500’s struggle to surpass the mid-5,200s, amid typical election year volatility in April and May, points to possible near-term challenges.

    Support levels at 5,000, 4,800, and 4,600 will be crucial if the index falters.

    The lack of deeply oversold conditions, as indicated by the three-month VIX relative to historical levels and the percentage of stocks above their 50-day moving averages, suggests that the market might need further corrections to establish a more robust low.

    Read Now: Fund Managers Are The Most Optimistic Since 2022: ‘Bull Sentiment Not Quite At Close-Your-Eyes-And-Sell Levels’

    Image: Shutterstock

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    This article Most S&P 500 Stocks No Longer Trade Above 50-Day Average: Healthy Pullback Or Is The Bull Market Over? originally appeared on Benzinga.com

    © 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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  • Got $500 to Invest in Stocks? Put It in This Index Fund.

    Got $500 to Invest in Stocks? Put It in This Index Fund.

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    It doesn’t take much money to get a lot out of investing. Give the stock market enough time, and compounding will take good care of you. But what if you had just $500 to kick-start your investing portfolio?

    An index fund — designed to track a specific market index — would be an excellent choice to start. These funds are buckets of individual stocks lumped together and traded under one ticker symbol.

    The Vanguard S&P 500 ETF (NYSEMKT: VOO) tracks, you guessed it, the S&P 500.

    Here are three reasons investors should put at least their first $500 into this rock-solid index fund.

    1. It’s a Warren Buffett pick

    Warren Buffett is known for his legendary career as a stock picker and CEO of Berkshire Hathaway. Within Berkshire, he has a massive $365 billion stock portfolio with dozens of companies.

    With all his immense investing talent, Buffett keeps just two index funds in his portfolio. Both happen to track the S&P 500, which isn’t a coincidence.

    According to Buffett, owning an S&P 500 index fund is the best thing most investors can do, as he said at Berkshire’s 2020 annual shareholder meeting. One of the two index funds in Berkshire’s portfolio is the Vanguard S&P 500 ETF.

    2. It tracks the world’s best index

    Buffett’s fascination with the S&P 500 is well justified. The index itself represents about 500 of America’s most prominent corporations.

    The U.S. is the world’s largest economy, so getting into the S&P 500 is a badge of honor that puts a company among the world’s best businesses. It’s hard to argue against the wealth our capitalist system has created.

    The market can become volatile as a reflection of how buyers and sellers feel at any given time, but over the long term, the S&P 500 has always bounced back and risen to new highs. That remains true today, with the index now at all-time highs:

    ^SPX Chart

    ^SPX Chart

    The Vanguard S&P 500 ETF hitches your wagon to this financial horse, and for practically nothing in return. All funds charge an expense ratio to compensate those running the fund, but this fund’s expense ratio is just 0.03%, or less than $0.02 on your $500 investment.

    3. It provides instant diversification

    Perhaps the best part of a fund like the Vanguard S&P 500 ETF is its diversification. It’s hard to buy many shares of stock with $500, but buy one share of this fund, and you’re instantly exposed to every company in the S&P 500. That means you own a tiny piece of all the “Magnificent Seven” stocks and hundreds more!

    It might be tempting to buy one stock with $500, but what if something happens to that one company? The S&P 500 has proved to be resilient since its founding, and barring a doomsday economic scenario, it will still be here 10, 20, or 50 years from now.

    And your money will be working for you all that time. You won’t find a better use for $500 than buying a fund like the Vanguard S&P 500 ETF.

    Should you invest $1,000 in Vanguard S&P 500 ETF right now?

    Before you buy stock in Vanguard S&P 500 ETF, consider this:

    The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Vanguard S&P 500 ETF wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

    Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.

    See the 10 stocks

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    Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway and Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.

    Got $500 to Invest in Stocks? Put It in This Index Fund. was originally published by The Motley Fool

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  • Why investors should buy into an ‘egregiously expensive’ stock market, Bank of America says

    Why investors should buy into an ‘egregiously expensive’ stock market, Bank of America says

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    REUTERS/Dario Cantatore/NYSE Euronext

    • The stock market may be expensive based on traditional measures, but that doesn’t mean investors should avoid stocks.

    • Bank of America said comparing present valuations to the past is comparing apples to oranges.

    • “The S&P 500 is half as levered, is higher quality and has lower earnings volatility than prior decades,” BofA said.

    The stock market “is egregiously expensive” relative to its past, but that doesn’t mean investors should avoid stocks, according to a Wednesday note from Bank of America’s Savita Subramanian.

    The US equity strategist said that while the S&P 500 is “statistically expensive on 19 of 20 metrics and is trading at a 95th percentile price to trailing earnings ratio based on data back to 1900,” it doesn’t mean that stock prices can’t continue to rise from here, and for good reason.

    In particular, Subramanian took issue with comparing current stock market valuations to the past, when the composition of the S&P 500 looked a lot different.

    “I think the one bear case that I hear a lot that I want to try to debunk is just the idea that the market is too expensive,” Subramanian told CNBC on Wednesday. “Folks will take today’s S&P and compare it to 10 years ago, 20 years ago, 30 years ago, 40 years ago. I don’t think that makes sense because the market today is such a different animal.”

    The S&P 500 currently trades at a 12-month trailing price-to-earnings ratio of 24.5x, well above its 10-year average of 21.1x. Meanwhile, the S&P 500’s forward price-to-earnings ratio is 20.4x, more than one standard deviation above its 30-year average of 16.6x.

    But maybe the S&P 500 should trade at a higher valuation than it did 30 years ago when considering that the underlying companies within the S&P 500 are much more profitable today than they were in the past, Subramanian suggests.

    “The S&P 500 is half as levered, is higher quality and has lower earnings volatility than prior decades. The index gradually shifted from 70% asset-intensive manufacturing, financials and real estate companies in 1980 to 50% asset-light Tech & Health Care,” she explained.

    And that different composition shows up in the S&P 500’s profit margins, which have doubled from less than 6% in the 1980s to nearly 12%.

    “We’re in a different ball game here so you can’t just look at the S&P today and take that P/E and compare it over time,” Subramanian told CNBC.

    All in, despite the historically high market valuations, stock prices will likely continue trending higher as long as corporate earnings don’t plummet from their current levels.

    “This realistic good case scenario suggests a fair value for the S&P 500 of ~5500,” Subramanian said, representing potential upside of 9% from current levels.

    Read the original article on Business Insider

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  • S&P 500 closes at a new all-time high as fresh data drives optimism for rate cuts

    S&P 500 closes at a new all-time high as fresh data drives optimism for rate cuts

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    Andrew Burton/Getty Images

    • The S&P 500 notched an all-time record on Friday, closing above its previous high set two years ago.

    • The Dow and Nasdaq also surged as traders took in strong economic data.

    • The University of Michigan’s consumer sentiment gauge jumped to its highest since 2021.

    Strong economic data fueled the S&P 500 to a record on Friday, with markets getting more optimistic about potential rate cuts from the Federal Reserve.

    Soon after trading began, the benchmark index was already on pace to clear its all-time closing high of 4,796.56 set two years ago. And by midday, it cleared its intraday record of 4,818.62.

    The Dow Jones Industrial Average had already topped its prior high last month and set a fresh record on Friday. Meanwhile, the Nasdaq Composite outpaced the other indexes as chipmakers led the tech sector higher, but it remains more than 4% below its highs.

    The stock market rally came as the University of Michigan’s consumer sentiment survey showed Americans are feeling better about the economy and see prices cooling.

    Inflation expectations for the year ahead fell to 2.9%, the lowest since December 2020, giving the Fed more breathing room to loosen monetary policy this year.

    “The powerful surge shows Americans are feeling the effects of lower inflation,” said Robert Frick, an economist with Navy Federal Credit Union. “That’s transmitted directly through prices at the pump, which have been falling since September, and less directly given wage increases have risen above the rate of inflation. The strong jobs market also heavily influences American’s view of the economy in general.”

    Here’s where US indexes stood as the market closed at 4:00 p.m. on Friday: 

    Here’s what else is going on: 

    In commodities, bonds, and crypto: 

    • Oil prices dropped, with West Texas Intermediate down 0.28% to $73.87 a barrel. Brent crude, the international benchmark, moved lower 0.23% to $78.88 a barrel.

    • Gold edged higher 0.46% to $2,031.00 per ounce.

    • The 10-year yield rose 1 basis point to hover at 4.149%.

    • Bitcoin climbed 2.35% to $41,876.

    Read the original article on Business Insider

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  • The S&P 500 will trade near its all-time high before a recession drags it down again in a topsy-turvy 2024, Société Générale says

    The S&P 500 will trade near its all-time high before a recession drags it down again in a topsy-turvy 2024, Société Générale says

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    2024 is going to be an up-and-down year for the stock market, according to Société Générale.ANGELA WEISS/Getty Images

    • Investors should get ready for a topsy-turvy 2024, according to Société Générale.

    • The S&P 500 will climb higher in the first quarter but then plunge 12%, the French bank said.

    • That drop will put the benchmark index in “buy the dip” territory by the end of the year.

    Get ready for an up-and-down 2024 where the S&P 500 nears record highs, plunges, and then stages another comeback, Société Générale says.

    In its outlook for the year ahead published Monday, the French bank said it expects the benchmark index to climb to 4,750 points over the first three months of the year, which would put it within touching distance of the all-time high of 4,796 it reached in January 2022.

    The gauge of large-cap US stock prices will then slide 12% to 4,200 in mid-2024 as a mild recession hits the US, before rallying back to 4,750 over the fourth quarter as the Federal Reserve starts slashing interest rates, SocGen added.

    “By the end of the year, we expect to see rate cuts by the Fed of 150 basis points, a downturn in GDP growth and clarity on the political election cycle,” head of US equity strategy Manish Kabra wrote. “The S&P 500 should be in ‘buy-the-dip’ territory, as leading indicators for profits continue to improve.”

    “Yet, the journey to the end of the year should be far from smooth, as we expect a mild recession in the middle of the year, a credit market sell-off in 2Q and ongoing quantitative tightening,” he added.

    The S&P 500 traded at 4,556 as of Wednesday’s closing bell. It’s climbed 19% year-to-date, lifted by the stellar performance of the so-called “Magnificent Seven” Big Tech stocks and investors’ hope that the Fed is gearing up to cut borrowing costs.

    Kabra isn’t the only top Wall Street strategists who’s predicted the index could flirt with record highs next year.

    Goldman Sachs’ David Kostin said earlier this month that he’s expecting the S&P 500 to trade at 4,700 points by the end of 2024.

    Meanwhile, both Bank of America and RBC Capital Markets have set year-end targets of 5,000, which would see the gauge comfortably clear its previous all-time highs.

    Read the original article on Business Insider

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  • Stocks are entering the next leg of the bull market and the S&P 500 can hit a record-high of 5,000 by end of 2024, veteran strategist says

    Stocks are entering the next leg of the bull market and the S&P 500 can hit a record-high of 5,000 by end of 2024, veteran strategist says

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    The bull market in stocks could even run on until 2026 if business and fiscal conditions align, one market veteran says.Reuters / Paulo Whitaker

    • The S&P 500 could be on track to notch a new record next year, according to market vet Phil Orlando.

    • The Federated Hermes chief stock strategist said the Fed was likely done with its rate hikes.

    • That means the second leg of the bull market has room to run on into 2024, he predicted.

    The bull market in stocks has more room to run, and it could take the S&P 500 to a new high by the end of next year, one market veteran says.

    That’s the thesis of Phil Orlando, the chief equity strategist at Federated Hermes. Orlando sees the S&P 500 surging to 5,000 by the end of 2024, representing an upside of around 10% from the benchmark index’s current levels.

    “We think that stocks are going to grind higher. They’ve gone from 4100 to 4500. And we think that’s a trend that’s got legs,” Orlando said in an interview with Bloomberg Surveillance on Monday.

    His optimism comes largely because he thinks the Fed is done hiking interest rates. Central bankers have already raised rates 525 basis points over the last 20 months to lower inflation, a move that hammered stocks in 2022.

    But inflation has cooled dramatically from its highs last summer. Prices rose just 3.2% year-per-year in October, lower than the expected 3.3% increase, the Consumer Price Index report showed last week.

    The case for the Fed to stop interest rate hikes is also supported by the recent surge in bond yields, with the yield on the 10-year US Treasury briefly surpassing 5% last month. Higher bond yields influence other interest rates in the economy, which have also helped tighten financial conditions.

    “The bond market’s done the heavy lifting for [the Fed] since the last Fed rate hike in July,” Orlando said on Bloomberg. “That gives the Fed the luxury, in my view, to step back and say, you know what, we don’t have to hike any more. We can just sit here on the sidelines for the next year and allow the gradual slowing of inflation to occur.”

    Markets are now pricing in an 81% chance the Fed could cut rates in the first half of next year, according to the CME FedWatch tool.

    Equities have been rallying in November as investors assess the more positive outlook for rates. The S&P 500 has climbed 7% over the past month, trading around 4,535 on Monday. That rally could even continue into 2025 and 2026, Orlando said, especially if the upcoming election cycle encourages more market-friendly business and fiscal policies.

    Read the original article on Business Insider

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  • The Wolf of Wall Street: Why the S&P 500 Index is still the ticket to riches

    The Wolf of Wall Street: Why the S&P 500 Index is still the ticket to riches

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    Jordan Belfort, the author of the new book “The Wolf of Investing,” has some salty things to say about Wall Street.

    For starters, he described it as a “giant, bloodsucking monster … the Wall Street fee machine complex atop the entire global financial system — extracting excess fees and commissions and creating general financial mayhem.”

    Average investors, he added, lose all the time because they are baited by the latest stock tip they hear from a friend or read about on TikTok. There’s more: “Depending on who’s been advising you, there’s an excellent chance that a significant portion of your annual returns are being unnecessarily cannibalized by fees, commissions, and pumped-up annual performance bonuses,” he told me.

    You may already be familiar with Belfort. His best-selling autobiography, “The Wolf of Wall Street,” is the basis for the 2013 Oscar-winning film of the same name starring Leonardo DiCaprio. Belfort, a former broker, made loads of dough by peddling shady sales of penny stocks — and turned around and blew it away on drugs, sex, and other debauchery.

    Belfort served 22 months in jail for securities fraud relating to his activities in the 1980s and ’90s with his brokerage firm Stratton Oakmont.

    This time out of the gate, Belfort’s take on Wall Street is far less titillating and decidedly more conventional, but “you can thank me when you’re ready to retire, and you have a giant nest egg waiting for you,” he wrote.

    Recently, Belfort discussed with Yahoo Finance his simple investing advice like sticking to an S&P 500 index fund, which so far this year is up 7.75% and has gained about 10.7% on average annually since it was introduced in 1957.

    Sure it sounds boring, but there are some hot tech stocks along with proven stalwarts in the S&P 500 Index, which includes Microsoft, Amazon, Alphabet, Tesla, Meta, and Berkshire Hathaway.

    Edited excerpts:

    Oh boy, Jordan, let’s jump right into it. Rage against the machine aside, what’s the overall thesis of your book?

    It’s about long-term investing. Picking individual stocks or bonds and trying to beat the market, so to speak, has historically proven to be extremely difficult. People have trouble wrapping their heads around how even a small amount of money over time through long-term compounding, reinvesting dividends, and making small contributions along the way to your portfolio can amount to a truly massive amount of money. You don’t need to make massive returns every single year to have a very, very rich portfolio when you retire.

    Jordan Belfort, known for his best-selling autobiography,

    Jordan Belfort, known for his best-selling autobiography, “The Wolf of Wall Street.” (Jordan Belfort)

    What makes you crazy about the way Wall Street works, or doesn’t, for the average investor?

    It is this two-headed monster. It’s got the useful part where they create massive value and they serve a vital mission function to the US economy. Then they have the not-so-good part.

    You’re a huge fan of the S&P 500 Index, quite a leap from your broker days. What’s the magic there?

    Here’s why I love it. The S&P index of 500 stocks is this perfect mouse trap capturing the value of the US economy and also the global economy because a great portion of these companies do 34% of their business overseas. You’re getting global exposure to the creation of wealth with the best managers.

    Vanguard created this amazing vehicle for the average person anywhere in the world to get all the best out of the value that Wall Street creates and not get sucked into the disastrous allure of short-term trading in the next shiny object. The fact is that human beings, including me, are lousy stock pickers by nature. We sell when we should be buying and buy when we should be selling. The way to protect against this sort of human nature of doing the wrong thing and selling into fear is through indexing.

    The S&P 500 Index has been a great investment historically. Over 20 years, it always makes money and it balances out to an annual return of 10.5% give or take a percentage. As you get older, you want to start shifting more into more index bond funds in your portfolio percentage-wise because you want to have less exposure to risk.

    How would you advise someone who is stashing away funds for retirement?

    Generally speaking, if I were in my thirties or forties, I would have 80% of my money in the S&P 500 Index and maybe 20% in a total bond market index. As you get older, you could start bringing that down to 70/30 and ultimately to 60/40.

    Of course, there are other things like your general risk tolerance to consider. But I really love index funds because they take away the guesswork. They protect you from your own worst impulses, which is to trade for the short term and try to pick stocks that are winners. And that’s just really, really hard to do.

    Automatically check the box to reinvest your dividends and keep putting money into your funds every month or every quarter as you can, whatever the amount is, whether it’s $25, $50 a month, $100, $500, $1,000, whatever you could afford to do, just keep putting more money into the funds along the way at regular intervals. Don’t even consider the prices you are paying. And ignore if the market is up, down, or sideways.

    Jordan, admit it, it’s fun to invest in individual company stocks…

    It’s great to take a small percentage of your capital and set it aside for healthy speculation, if you like that stuff, right? It’s fun, and it’s empowering, and it’s great to do that. I just think that you have to set aside a certain amount of capital for that, stick to it, and be ready to lose it.

    What’s the investing trap for people?

    They think if they only have a small amount to invest that they are never going to get rich. ‘I need to go buy a penny stock where I can hopefully go up a thousand percent and I could make a big hit.’ That’s the trap. They try to time buying a growth stock. ‘I want to buy the next Apple because that’s the only way I’m gonna get rich,’ they say. ‘I’m not gonna get rich buying the S&P 500.’

    The answer is it does work out through long-term compounding. But you have to wait until this late stage threshold, which starts at 23, 24 years, and then suddenly you are like, whoa, this stuff actually works. It’s math.

    A parting thought?

    The Wall Street fee machine con is out there, and it’s very obvious once you recognize what’s going on with these advertisements and propaganda that basically leads people to make decisions that go against their best self-interest.

    It’s this wild sort of circus that’s convincing people to stay in this game, this casino, which is really tilted heavily against you. The odds are stacked against you on so many levels.

    By the way, if any one of Wall Street’s newfangled ideas hits, guess what? It becomes part of the S&P 500, and you’ll make money.

    Kerry Hannon is a Senior Reporter and Columnist at Yahoo Finance. She is a workplace futurist, a career and retirement strategist, and the author of 14 books, including “In Control at 50+: How to Succeed in The New World of Work” and “Never Too Old To Get Rich.” Follow her on Twitter @kerryhannon.

    Click here for the latest personal finance news to help you with investing, paying off debt, buying a home, retirement, and more

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  • ‘Big Short’ Michael Burry’s bets against S&P 500 and Nasdaq pay off

    ‘Big Short’ Michael Burry’s bets against S&P 500 and Nasdaq pay off

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    Jim Spellman/Getty Images

    • “Big Short” investor Michael Burry’s bearish stock bets earlier are paying off.

    • In the second quarter, his management fund Scion held put options on ETFs that track the S&P 500 and Nasdaq.

    • Since then, the S&P 500 has fallen about 8%, and the Nasdaq has tumbled 9%.

    Michael Burry’s bearish equity bets earlier this year have proven correct as the S&P 500 and Nasdaq have sold off sharply.

    His spot-on bets against subprime mortgages were portrayed in “The Big Short” and earned him a massive investor following.

    On Friday, the S&P 500 entered correction territory, joining the Nasdaq after it made a similar move earlier this week.

    By the end of the second quarter, his management fund Scion held put options on two exchange-traded funds — SPDR S&P 500 and Invesco QQQ — that track the major index funds.

    Since then, the S&P 500 has fallen about 8%, and the Nasdaq has tumbled 9%.

    Burry regularly rings the alarm on stocks. In recent years, the Scion chief has warned of a massive bubble, and once suggested that the S&P 500 would bottom out at around 1,900 points.

    But he recently admitted to making a mistake this year. In late January, Burry tweeted the word “sell,” ahead of a bull-market run.

    Correction: October 27, 2023 — An earlier version of this story was based on tweets that aren’t affiliated with Burry and references to them have been removed.

    Read the original article on Business Insider

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  • The S&P 500 is on the verge of a technical breakdown. Here’s the sell signal to watch for.

    The S&P 500 is on the verge of a technical breakdown. Here’s the sell signal to watch for.

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    Spencer Platt/Getty Images

    • The S&P 500 is on the verge of a technical breakdown, according to Fairlead Strategies’ Katie Stockton.

    • Stockton said that 4,180 is a key support level that needs to be preserved to prevent further selling.

    • Extreme sentiment readings suggest to Stockton that a reversal in stock prices could be imminent.

    The S&P 500 is on the verge of a technical breakdown, but Fairlead Strategies’ founder Katie Stockton says don’t sell stocks just yet.

    That’s because oversold extremes are flashing for certain indicators, suggesting that a rebound could be imminent.

    “The downdraft has the potential to yield a breakdown, but we would not sell into weakness with signs of intraday downside exhaustion supporting a rebound that could preserve support, or at least yield a better selling opportunity,” Stockton said in a Thursday note to clients.

    Stockton is closely watch the support range of 4,180 to 4,195 on the S&P 500. A decisive breakdown below 4,180, typically marked by two consecutive weekly closes below that level, would be the signal to Stockton that the current risk-off nature of the stock market is set to extend and drive stock prices even lower.

    Stockton’s support range for the S&P 500 slightly differs from the closely watched 4,200 level among technical analysts. Here’s what Stockton had to say about that on Wednesday.

    “We have to look at these support levels as cushions, not precise points. They never are precise in that there’s just too many market participants to allow them to be that. Our support zone is actually 4,180 to 4,195, so it’s a bit lower than that 4,200 threshold,” Stockton told CNBC on Wednesday.

    If 4,180 fails to hold as support for the S&P 500, Stockton identified 3,920 as the next support level to watch, which represents potential downside of 6% from current levels.

    The S&P 500 traded below 4,180 for the first time since June on Thursday, trading to as low as 4,151.

    But for now, Stockton is anticipating a potential reversal in stock prices in the near-term.

    “We would not assume a breakdown will occur, noting oversold extremes are prevalent not only in price, but also in breadth like the percentage of stocks above their 50-day moving averages,” Stockton said.

    About 17% of S&P 500 stocks are currently trading above their 50-day moving average, which is a level that has been consistent with bottoms during market corrections in the past.

    The missing ingredient for a stock market recovery right now, according to Stockton, is a consolidation in interest rates. If interest rates can stop moving higher, that would be a good sign that stock prices can stage a recovery.

    “The elevated level of the VIX shows fear in the market, so a reversal could be abrupt. We believe consolidation in yields is needed to instill a shift in sentiment, and our indicators suggest that yields may see a prolonged consolidation phase,” Stockton said.

    The 10-year US Treasury yield fell six basis points on Thursday to 4.89%, but it has been consistently testing the 5% level for the past week. If the 10-year yield jumps above 5.04%, that would be a further signal to Stockton that weakness in stock prices could persist.

    Read the original article on Business Insider

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  • Nvidia Plans to Buy Back Billions in Stock. Other Companies Could Join in Soon.

    Nvidia Plans to Buy Back Billions in Stock. Other Companies Could Join in Soon.

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    Nvidia Plans to Buy Back Billions in Stock. Other Companies Could Join in Soon.

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  • Pfizer Earnings Beat. Guidance Disappoints.

    Pfizer Earnings Beat. Guidance Disappoints.

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    Pfizer Stock Gains After Earnings Beat. Revenue and Outlook Aren’t So Good.

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  • AT&T Gets an Upgrade. Why Analysts Are Still Cautious.

    AT&T Gets an Upgrade. Why Analysts Are Still Cautious.

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    AT&T ‘Has Led the Way Down’ for Telecoms. Why the Stock Still Grabbed an Upgrade.

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  • 6 Companies That Raised Their Dividends This Week

    6 Companies That Raised Their Dividends This Week

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    This copy is for your personal, non-commercial use only. To order presentation-ready copies for distribution to your colleagues, clients or customers visit http://www.djreprints.com.

    https://www.barrons.com/articles/apple-pepsi-dividend-stock-investing-3516ced1

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  • J&J to Lift Dividend for 61st Year. These 6 Firms Are Raising Payouts Too.

    J&J to Lift Dividend for 61st Year. These 6 Firms Are Raising Payouts Too.

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    This copy is for your personal, non-commercial use only. To order presentation-ready copies for distribution to your colleagues, clients or customers visit http://www.djreprints.com.

    https://www.barrons.com/articles/stocks-raising-dividends-j-j-costco-60f5d6ad

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  • Small-Cap Stocks Look Ready to Rally. Take a Look at These Two. 

    Small-Cap Stocks Look Ready to Rally. Take a Look at These Two. 

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    Small-cap stocks have gotten hit hard recently. They look ready to take off again, and a few names stand out as particularly promising. 

    As of midday on Monday, the



    Russell 2000 index of companies with smaller market capitalizations had dropped about 4% from its closing level on March 8, before the parent company of Silicon Valley Bank disclosed a shake-up of its balance sheet that raised concerns about its survival. That, of course, triggered the bank runs that rattled the banking system last month.

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  • Strong Economic Data Weaken the Case for Continued Stock Rally

    Strong Economic Data Weaken the Case for Continued Stock Rally

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    The dash for trash has hit a speed bump. Stocks faltered again this past week as the early-year rally, led by rebounds in 2022’s speculative-grade losers, ran into resistance from higher expected interest rates from the Federal Reserve in the wake of persistent inflation readings and few signs that growth is faltering.

    Economists at an array of major Wall Street banks, including Goldman Sachs, Bank of America, and Citigroup, lifted their forecasts of the eventual peak in the central bank’s target range for the overnight federal-funds rate, to 5.25% to 5.50%, effectively bringing them in line with the fed-funds futures market. Deutsche Bank now is expecting a 5.6% single-point peak, up a half-percentage-point from its previous estimate, and among the highest forecasts.

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  • Gold’s Awakening May Make Investors Sleep Less Soundly

    Gold’s Awakening May Make Investors Sleep Less Soundly

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    Gold’s Awakening May Make Investors Sleep Less Soundly

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  • Bitcoin Price And Risk Assets Jump In Correlated Move

    Bitcoin Price And Risk Assets Jump In Correlated Move

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    The below is an excerpt from a recent edition of Bitcoin Magazine PRO, Bitcoin Magazine’s premium markets newsletter. To be among the first to receive these insights and other on-chain bitcoin market analysis straight to your inbox, subscribe now.

    An independent bitcoin rally or a high-beta move? Either way, bitcoin holders are celebrating the latest action to start 2023. Bitcoin has shown some significant momentum and has powered through every key short-term price level across daily moving averages and on-chain realized prices. In fact, every major high-beta play in the market is showing the same strength which gives us more caution than confidence in this latest short squeeze highlighted last week in “Bitcoin Rips To $21,000, Shorts Demolished In Biggest Squeeze Since 2021.”

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    Dylan LeClair And Sam Rule

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  • Too Much Government Debt Could Become a Big Problem for the Stock Market

    Too Much Government Debt Could Become a Big Problem for the Stock Market

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    It’s always fun until the bill comes due—and the bill always comes due. In fact, it’s coming due right about now.

    On Friday, Treasury Secretary Janet Yellen warned Congress that the U.S. would hit its debt ceiling this coming Thursday, earlier than many had expected. That doesn’t mean the government will be forced to stop paying its bills then—Yellen believes that the Treasury has enough cash and other ways to raise money to last it until early June—but it does mean that an issue that was still purely theoretical has become far more pressing as the X date approaches.

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  • The Dow Buried the Nasdaq. Now, What Happens Next.

    The Dow Buried the Nasdaq. Now, What Happens Next.

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    Y2K is back in a big way in the fashion world, but history isn’t just repeating itself on the runway. The stock market appears to be nostalgic for the early 2000s, as it is once again turning its back on tech.

    There were few places for investors to hide in this year’s bloodbath, but those exposed to the tech-heavy


    Nasdaq Composite


    index undoubtedly had it the worst. Through the close Friday, the last trading day of the year, the Nasdaq had plummeted 33.1% in 2022, falling 8.7% in the past month alone.

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