April 1, 2024
Good morning,
Welcome to Q2. The overwhelming feeling this morning for investors, and particularly for professional market strategists, is one of surprise. Despite the unusually wide range of market expectations among the “Year Ahead” forecasts last December, I do not recall a single outlier that expected a gain of over 10% by the S&P 500 Index (SPX) in the first 3-months of the year. Nor that the SPX would be the best performing Index of the major equity indexes in the U.S. and abroad.
We’ll cover Q1 and the quarters ahead in my monthly note on Thursday.
The market did grind higher last week, although it was not reflected in all the indexes. SPX for example was virtually unchanged (+.007%) on the holiday shortened week. This is classic bull market behavior – to grind higher. As valuations rise along with sentiment, pullbacks can be expected. Looking ahead for possible catalysts of a pullback, we have March employment data this Friday, CPI next week, and earnings season beginning on April 12th.
This final paragraph has become repetitive. The market is approaching overbought levels that have been consistent with consolidation. However, the overarching message from the strong momentum is that the market remains in an uptrend. Initial pullbacks should be shallow and short.
See you Thursday.
Be well,
Mike
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