It’s been a very volatile week in the market, but thanks to this morning’s worse-than-expected jobs report (which is driving interest rates lower), it’s looking like a positive one—as of this morning, the big-cap indexes and most growth measures are flat to up 1% on the week, while broader indexes are up 1% to 1.5%.
Stepping back a bit, the support seen last week and again after some downside testing earlier this week is an encouraging sign, as is the dip in interest rates—as of this morning, the five-year Treasury note is off 18 basis points on the week, most of which came yesterday and this morning.
As for the market itself, the rally has put the intermediate-term trend on the fence—some indexes (mostly the broader ones) have nosed above their 50-day lines, while others are still a bit below. That’s obviously a step in the right direction, and we’re happy to see the broad market pick up steam (number of stocks hitting new lows has been surprisingly tame the past few days).
To be fair, growth measures are lagging a bit, and when you drill down to individual stocks, it’s still a mixed bag at best—earnings season has brought a fair number of blowups, and even among some of the good-looking gaps higher, we’ve seen a quick wave of selling on strength. Obviously, that can change—earnings season is still in full swing—but so far it definitely looks like big investors are still repositioning their portfolios somewhat.
All in all, the action is good to see, but it’s not quite decisive—though the next couple of days will be key. Today, we’re leaving our Market Monitor at a level 6, but we could bump that up come Monday if today’s strength holds/follows through and more individual stocks kick into gear.
POTENTIAL BUYS
Diamondback Energy (FANG) has pulled back along with most energy names, testing its 50-day line on Wednesday (its first test of that line since getting going in February) after its Q1 report. Risk/reward-wise, we see an opportunity—if you’re game, you could buy some above 201 (above the 200 level, basically) with a tight stop near 190 or so (below the 50-day line and this week’s low).
It’s a similar setup with SM Energy (SM), except that the stock is rebounding nicely today off that 50-day line thanks to earnings—buying it above 50.5, with a stop near 45.5, seems like a good bet if you want more exposure to energy.
SUGGESTED SELLS
Partial Sells
Howmet Aerospace (HWM) gapped up beautifully on earnings this week—maybe it sets up a fresh entry point within a couple of weeks, but if you own some, you can consider booking partial profits here with a stop near 68.
None this week
Full Sells
Crocs (CROX) – The firm does report earnings early next week, but it’s been unable to get above its 50-day line and we have a small loss, so we’ll cut bait and re-evaluate after earnings.
Novo Nordisk (NVO) – tripped stop.
SUGGESTED STOPS
Beacon Roofing (BECN) near 95
Cava Group (CAVA) near 57
CNX Resources (CNX) near 22.6
Chord Energy (CHRD) near 172
Coinbase (COIN) near 199
Diamondback Energy (FANG) near 190
Eldorado Gold (EGO) near 13.6
Howmet Aerospace (HWM) near 68
KKR & Co (KKR) near 93
Magnolia Oil & Gas (MGY) near 24
Martin Marietta (MLM) near 569
Micron Technology (MU) near 107
Natera (NTRA) near 85
Robinhood (HOOD) near 16.2
Southern Copper (SCCO) near 102.5
Sweetgreen (SG) near 19.5
Valero (VLO) near 153
Warrior Met Coal (HCC) near 62
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