xxz114
Friday (May 3) stocks propelled higher after the Labor Department reported weaker-than-expected job growth last month and easing wage growth, buoying investors’ confidence up the Federal Reserve will eventually lower interest rates. The S&P 500 index ended at 5,128, as reading in Table 1.
|
Table 1. Apr, May (3) 2024: M & T |
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|
3/28/2024 |
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|
DATE |
S&P 500 |
%CH.1 |
P/m |
%CH.2 |
%CH.3 |
|
03/28/24 |
5,254.35 |
* |
* |
* |
* |
|
04/01/24 |
5,243.77 |
-0.20% |
m |
-0.20% |
* |
|
04/02/24 |
5,205.81 |
-0.72% |
m |
-0.92% |
* |
|
04/03/24 |
5,211.49 |
0.11% |
P |
-0.82% |
* |
|
04/04/24 |
5,147.21 |
-1.23% |
m |
-2.04% |
* |
|
04/05/24 |
5,204.34 |
1.11% |
P |
-0.95% |
* |
|
04/08/24 |
5,202.39 |
-0.04% |
m |
-0.99% |
* |
|
04/09/24 |
5,209.91 |
0.14% |
P |
-0.85% |
* |
|
04/10/24 |
5,160.64 |
-0.95% |
m |
-1.78% |
* |
|
04/11/24 |
5,199.06 |
0.74% |
P |
-1.05% |
* |
|
04/12/24 |
5,123.41 |
-1.46% |
m |
-2.49% |
* |
|
04/15/24 |
5,061.82 |
-1.20% |
m |
-3.66% |
* |
|
04/16/24 |
5,051.41 |
-0.21% |
m |
-3.86% |
* |
|
04/17/24 |
5,022.21 |
-0.58% |
m |
-4.42% |
* |
|
04/18/24 |
5,011.12 |
-0.22% |
m |
-4.63% |
* |
|
04/19/24 |
4,967.23 |
-0.88% |
m |
-5.46% |
* |
|
04/22/24 |
5,010.60 |
0.87% |
P |
-4.64% |
* |
|
04/23/24 |
5,070.55 |
1.20% |
P |
-3.50% |
* |
|
04/24/24 |
5,071.63 |
0.02% |
P |
-3.48% |
* |
|
04/25/24 |
5,048.42 |
-0.46% |
m |
-3.92% |
* |
|
04/26/24 |
5,099.96 |
1.02% |
P |
-2.94% |
* |
|
04/29/24 |
5,116.17 |
0.32% |
P |
-2.63% |
0.32% |
|
04/30/24 |
5,035.69 |
-1.57% |
m |
-4.16% |
-1.26% |
|
*********** |
********* |
********* |
****** |
****** |
******* |
|
05/01/24 |
5,018.39 |
-0.34% |
m |
-4.49% |
-1.60% |
|
05/02/24 |
5,064.26 |
0.91% |
P |
-3.62% |
-0.70% |
|
05/03/24 |
5,127.79 |
1.25% |
P |
-2.41% |
0.55% |
|
NOTE |
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|
1. M & T is Momentums & Trends |
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|
2. Data Source: Yahoo Finance |
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|
3.P/m: Plus/minus |
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|
4. %CH.1: The Percent Change from previous day. |
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|
5. %CH.2: The Percent Change from Mar 28. |
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|
6. %CH.3: The Percent Change from Mar 28. |
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|
7. Author made Table. |
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The month of April is not only a notorious bear market almost every year, but also it’s a cruel month geopolitically: April 19 [F], for example, was the last leg of the bears’ 6-days consecutive advance, finally pulling S&P 500 below 5,000: The same day in Korea in the late 1950s police was ordered from Blue House to shoot the students, making peaceful demonstration against the bad
election.
What happened in the bond market, (including, Treasuries, MBS (Mortgage-Backed Securities), Municipalities, Corporations, and so on), in the chilly April climate?
Did simmering the flattener of the TYC (Treasury Yield Curve, which had been unduly severely inverted in the past 2 years or so) start on April 19 [F] coincident? Yes, not coincidentally but inevitably.
The abnormality of TYC should be normalized from April 22 [M], the right next session of Apr. 19 [F] because the market reactions in the past few months signaled clearly that it’s the time to fix the overdue problems in TYC which is a rule for the global bank system. In Europe, in particular, banks need a normal TYC because the bond market is weak over there.
The Fed (with monetary policy) and the government (with fiscal policy), and together (as an optimal policy mix) should work out from April 22 [M] to recover the healthy TYC in the future to avoid the worsening situation further in the down road.
On April 26 [F] the major indices rose, but the complexion of things beneath each index showed an otherwise: Long-term rates continued to rise, reading them in the “30 YR” column in Table 2.
|
Table 2 Treasury Yields of Apr, May (3), 2024 |
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|
DATE |
1 MT |
2 YR |
5 YR |
10 YR |
20 YR |
30 YR |
BLM |
YCS |
|
03/29/24 |
5.36% |
4.63% |
4.23% |
4.21% |
4.46% |
4.35% |
-0.43% |
-1.01% |
|
04/01/24 |
5.38% |
4.71% |
4.36% |
4.32% |
4.56% |
4.45% |
-0.39% |
-0.93% |
|
04/02/24 |
5.37% |
4.70% |
4.35% |
4.36% |
4.61% |
4.50% |
-0.34% |
-0.87% |
|
04/03/24 |
5.36% |
4.68% |
4.33% |
4.35% |
4.62% |
4.51% |
-0.33% |
-0.85% |
|
04/04/24 |
5.35% |
4.66% |
4.30% |
4.32% |
4.58% |
4.48% |
-0.34% |
-0.87% |
|
04/05/24 |
5.35% |
4.76% |
4.40% |
4.41% |
4.66% |
4.56% |
-0.35% |
-0.79% |
|
04/08/24 |
5.36% |
4.80% |
4.44% |
4.43% |
4.66% |
4.55% |
-0.37% |
-0.81% |
|
04/09/24 |
5.36% |
4.75% |
4.38% |
4.37% |
4.60% |
4.50% |
-0.38% |
-0.86% |
|
04/10/24 |
5.37% |
4.98% |
4.61% |
4.55% |
4.75% |
4.63% |
-0.43% |
-0.74% |
|
04/11/24 |
5.37% |
4.97% |
4.64% |
4.60% |
4.80% |
4.68% |
-0.38% |
-0.69% |
|
04/12/24 |
5.39% |
4.91% |
4.57% |
4.53% |
4.75% |
4.68% |
-0.38% |
-0.71% |
|
04/15/24 |
5.38% |
4.93% |
4.63% |
4.61% |
4.61% |
4.84% |
-0.32% |
-0.53% |
|
04/16/24 |
5.38% |
5.00% |
4.71% |
4.67% |
4.89% |
4.77% |
-0.33% |
-0.61% |
|
04/17/24 |
5.37% |
4.95% |
4.62% |
4.59% |
4.83% |
4.71% |
-0.35% |
-0.67% |
|
04/18/24 |
5.37% |
5.00% |
4.68% |
4.63% |
4.86% |
4.75% |
-0.37% |
-0.62% |
|
04/19/24 |
5.37% |
5.00% |
4.68% |
4.63% |
4.84% |
4.71% |
-0.37% |
-0.66% |
|
04/22/24 |
5.38% |
4.98% |
4.66% |
4.61% |
4.85% |
4.72% |
-0.36% |
-0.66% |
|
04/23/24 |
5.39% |
4.93% |
4.64% |
4.61% |
4.85% |
4.73% |
-0.33% |
-0.66% |
|
04/24/24 |
5.36% |
4.94% |
4.66% |
4.65% |
4.70% |
4.78% |
-0.29% |
-0.58% |
|
04/25/24 |
5.36% |
5.01% |
4.73% |
4.71% |
4.94% |
4.82% |
-0.30% |
-0.54% |
|
04/26/24 |
5.37% |
5.00% |
4.70% |
4.67% |
4.90% |
4.78% |
-0.34% |
-0.59% |
|
04/29/24 |
5.37% |
4.99% |
4.65% |
4.62% |
4.85% |
4.73% |
-0.34% |
-0.59% |
|
04/30/24 |
5.37% |
5.05% |
4.72% |
4.69% |
4.90% |
4.79% |
-0.34% |
-0.59% |
|
05/01/24 |
5.35% |
4.97% |
4.66% |
4.64% |
4.86% |
4.75% |
-0.34% |
-0.59% |
|
05/02/24 |
5.34% |
4.88% |
4.58% |
4.58% |
4.83% |
4.76% |
-0.34% |
-0.59% |
|
05/03/24 |
5.36% |
4.82% |
4.49% |
4.50% |
4.76% |
4.66% |
-0.34% |
-0.59% |
|
NOTE |
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|
BLM is (Banks’ Lending Margin) is 2/10Y is 2/10Y |
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|
YCS is (Banks’ Lending Margin) is 2/10Y is 1M/30Y |
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|
Data Source: Treasury Department. Author made the table. |
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Let us analyze the interactions between the economy and TYC, by inspecting underneath the hoods of both S&P 500 and TYC spaces:
Some quiet movements in TYC, that leads the stock market eventually: Most investors, nonetheless, fail to see the whole feature of the delicate relationship between the equity market which are dynamic, and well-covered by financial media and commentators, and TYC which is the front-runner of the top-to-bottom approach, which only institutional investors and a few individual investors closely follow.
|
Table 3. Weekly S&P 500 AND TYC From April 19 To May 3, 2024 |
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|
2024 |
4/19/21 [F] |
4/22/24 [M] |
4/26/24 [F] |
5/3/24 [F] |
||||
|
PRICE |
*** |
PRICE |
CH% |
PRICE |
CH% |
PRICE |
CH% |
|
|
S&P 500 |
$4,987 |
* |
$5,011 |
0.48% |
$5,100 |
2.27% |
$5,128 |
0.55% |
|
1M |
537 |
* |
538 |
-1 |
537 |
0 |
536 |
1 |
|
30Y |
471 |
* |
472 |
-1 |
478 |
-7 |
466 |
12 |
|
YCS |
-66 |
* |
-66 |
0 |
-59 |
-7 |
-59 |
0 |
|
2Y |
500 |
* |
498 |
2 |
500 |
0 |
482 |
18 |
|
10Y |
463 |
* |
461 |
2 |
467 |
-4 |
450 |
17 |
|
BLM |
-37 |
* |
-36 |
-1 |
-34 |
-3 |
-34 |
0 |
|
NOTE |
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|
. 1. Data Sources. S&P 500: Yahoo Finance, TYC: Wall Street Journal. |
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|
2. YCS: Yield Curve Stiffness. BLM: Bank Lending Margin. Author Made Table. The Table 3 with basis points [BPs] for TYC, pinpoints the intimate relationship between TYC and S&P 500 for two weeks from Apr. 19 [F] to May 3 [F]: On Monday (Apr. 22), revealing the clear-cut signal for the start of the correction of the prolonged inversion of TYC. The YCS (Yield Curve Stiffness), (if YCS is larger than +200BPs (2.00%), TYC is normal), remained the same, recording 0(zer0)BP, and S&P 500 rose merely+0.48%. On Apr. 22 [M] YCS was minus -66BPs which is far less than plus +200BPs, so that it should increase to plus +266BPs (= 200BPs – (-66BPs)). On Nov. 8, 2016 (election day), however, 1M and 30Y were plus+28BPs (0.28%) and plus+263BPs (2.63%), respectively, as found here, so TYC was normal, printing that YCS was 235 BPs (2.35%) (=+263BPs – (+28BPs)). On Friday (Apr 26) YCS moved higher, logging 7 BPs, and S&P 500 surged +2.27%. There were 3 higher yields than 478 BPs (4.78%) on Apr. 26 [F]: One was 484BPs (4.84%) on Apr. 15, next one was 482BPs (4.82%) on Apr. 25 (Th), and another one was 479BPs (4.79%) on Apr. 30 [T] in Table 2. The YCS had retreated since Apr. 25 steadily until May 3 [F], and come back the same level of Apr. 26 [F]. S&P 500 also slowed down, registering +0.55%. The BLM (Bank Lending Margin) also improved a bit, as seen in Table 3. The economy, representing by S&P 500, rallied highly in the week (Apr. 22 – Apr. 26), and ascended strongly in the past week (Apr. 29 – May 3) through the meeting of the FOMC and Char Jerome Powell’s relaxed press conference. In sum, on Mar 29, the Fed fulfilled a great accomplishment, optimizing the economy, interest rates, disinflation progress, and the labor market, and so on. We are so lucky that Fed performed prudently in the past 4 years when we have encountered various challenges such as financial stress, regional conflicts, and pandemic disturbances. So do Fed in the coming years. As a result, a rare soft landing is reasonably anticipated in 2024. |
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If you want the source of PPO (Paper and Pencil Only) approach, click this
Pulse Check #1 by The SDI (Sector Diffusion Index)
|
Table 4. The S&P 500 !! Select Sectors |
Diffusion |
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|
Apr-24 |
XLRE |
XLU |
XLC |
XLY |
XLF |
XLE |
XLI |
XLP |
XLK |
XLB |
XLV |
#P |
SDI |
|
04/01/24 |
m |
m |
P |
m |
m |
P |
m |
m |
P |
P |
m |
4 |
36% |
|
04/02/24 |
m |
P |
m |
m |
m |
P |
m |
m |
m |
m |
m |
2 |
18% |
|
04/03/24 |
P |
m |
P |
P |
m |
P |
P |
m |
P |
P |
m |
7 |
64% |
|
04/04/24 |
m |
m |
m |
m |
m |
P |
m |
m |
m |
m |
m |
1 |
9% |
|
04/05/24 |
P |
P |
P |
P |
P |
P |
P |
P |
P |
P |
P |
11 |
100% |
|
04/08/24 |
P |
P |
m |
P |
P |
m |
m |
m |
m |
P |
m |
5 |
45% |
|
04/09/24 |
P |
P |
P |
P |
m |
P |
m |
P |
P |
P |
P |
9 |
82% |
|
04/10/24 |
m |
m |
m |
m |
m |
P |
m |
m |
m |
m |
m |
1 |
9% |
|
04/11/24 |
P |
m |
m |
P |
m |
m |
P |
m |
P |
m |
m |
4 |
36% |
|
04/12/24 |
m |
m |
P |
m |
m |
m |
m |
m |
m |
m |
m |
1 |
9% |
|
04/15/24 |
m |
m |
m |
m |
m |
m |
m |
P |
m |
m |
m |
1 |
9% |
|
04/16/24 |
m |
P |
m |
m |
m |
m |
m |
m |
P |
m |
P |
3 |
27% |
|
04/17/24 |
m |
P |
m |
m |
P |
m |
m |
P |
m |
P |
m |
4 |
36% |
|
04/18/24 |
P |
P |
P |
m |
P |
m |
m |
P |
m |
m |
P |
6 |
55% |
|
04/19/24 |
P |
P |
m |
m |
P |
P |
m |
P |
m |
P |
P |
7 |
64% |
|
04/22/24 |
P |
P |
P |
P |
P |
P |
P |
P |
P |
P |
P |
11 |
100% |
|
04/23/24 |
P |
P |
P |
P |
P |
P |
P |
P |
P |
m |
P |
9 |
82% |
|
04/24/24 |
P |
P |
m |
P |
m |
P |
m |
P |
m |
P |
m |
6 |
55% |
|
04/25/24 |
m |
m |
P |
P |
m |
m |
P |
m |
P |
P |
m |
5 |
45% |
|
04/26/24 |
P |
m |
m |
P |
m |
m |
P |
P |
P |
P |
P |
7 |
64% |
|
AVERAGE |
47% |
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|
NOTE |
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|
Data Source is Yahoo Finance, Author Made Table. |
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The First Checker, The SDI logged 57% in Mar., and 47% in Apr. 26 in Table 4, which are upbeat optimal.
If any reader is interested in any sector among 11, for example, XLF (Financial) highlighted, you can check its daily dynamic fluctuations, recorded 13″m”, including 6 days in a row, and 7″P”, including 5 days in a row, out of 20 days in Apr. It’s a crucial information.
Pulse Check #2 by The TDI (Trifecta Distribution Index)
|
Table 5 Trifecta Data: Apr (1 26) |
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|
DATE |
SPY |
DIA |
QQQ |
SPY |
DIA |
QQQ |
Tp/Tm |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
03/28/24 |
523.21 |
397.78 |
444.01 |
* |
* |
* |
* |
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|
04/01/24 |
522.19 |
395.29 |
444.95 |
m |
m |
P |
S |
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|
04/02/24 |
518.87 |
391.61 |
441.11 |
m |
m |
m |
Tm |
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|
04/03/24 |
519.46 |
391.30 |
442.10 |
P |
m |
P |
D |
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|
04/04/24 |
513.12 |
326.08 |
435.34 |
m |
m |
m |
Tm |
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|
04/05/24 |
518.30 |
388.89 |
446.47 |
P |
P |
P |
Tp |
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|
04/08/24 |
518.67 |
389.10 |
440.60 |
P |
P |
m |
D |
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|
04/09/24 |
519.28 |
388.93 |
442.23 |
P |
m |
P |
D |
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|
04/10/24 |
514.27 |
384.59 |
438.37 |
m |
m |
m |
Tm |
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|
04/11/24 |
517.99 |
384.54 |
445.45 |
P |
m |
P |
D |
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04/12/24 |
510.70 |
379.89 |
438.08 |
m |
m |
m |
Tm |
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04/15/24 |
504.05 |
377.35 |
430.55 |
m |
m |
m |
Tm |
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|
04/16/24 |
503.57 |
378.19 |
431.34 |
m |
P |
P |
D |
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|
04/17/24 |
500.73 |
377.65 |
426.14 |
m |
m |
m |
Tm |
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|
04/18/24 |
499.29 |
377.81 |
422.87 |
m |
P |
m |
S |
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|
04/19/24 |
494.82 |
379.53 |
414.30 |
m |
P |
m |
S |
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|
04/22/24 |
499.72 |
382.37 |
418.82 |
P |
P |
P |
Tp |
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|
04/23/24 |
505.65 |
385.02 |
425.07 |
P |
P |
P |
Tp |
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04/24/24 |
502.52 |
383.77 |
421.89 |
m |
m |
m |
Tm |
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04/25/24 |
507.37 |
381.28 |
429.50 |
P |
m |
P |
D |
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04/26/24 |
508.48 |
392.24 |
430.94 |
P |
P |
P |
Tp |
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NOTE |
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1. Tp is Trifecta for Bull, Tm is Trifecta for Bear. |
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2. “D” is double “P”. And “S” is Single “P”. . |
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3. Data Source: Yahoo Finance.
The Second Checker, the TDI was 48% (= 100 * 13 / (13 + 14)), registering that Bulls vs. Bears was 13 (= 9 (Mar) + 4 (Apr)) vs. 14 (= 7 (Mar) + 7 (Apr)) in Table 6. The TDI was 48% which was upbeat optimal. If you are a trifecta trader, you must be interested in summary Table of Table 6. and “TP/Tm” column in Table 5. |
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Pulse Check #3 by The Uptrend and Other Indicators
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Table 7: M & T Mar, Apr (26), 2024 |
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Mar Bull 10 points |
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Apr Bull 8 points |
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2024 |
8Ps |
5Ps |
4Ps |
3Ps |
2Ps |
1Ps |
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|
Mar |
0 |
0 |
1 |
0 |
2 |
2 |
10 |
|
Apr |
0 |
0 |
0 |
1 |
0 |
5 |
8 |
|
Mar Bear 10 points |
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Apr Bear 12 points |
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2023 |
6ms |
5ms |
4ms |
3ms |
2ms |
1ms |
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Mar |
0 |
0 |
0 |
2 |
2 |
0 |
10 |
|
Apr |
1 |
0 |
0 |
0 |
1 |
4 |
12 |
|
NOTE |
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1. Data Source: Yahoo Finance. |
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2. Author made Table. |
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3. M & T is Momentums & Trends |
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The Third Checker, the Uptrend was 45% (= 100 * 18 / (18 + 22)), registering that Bulls vs. Bears was 18 (= 10 (Mar) + 8 (Apr)) vs. 22 (= 10 (Mar) + 12 (Apr)) in Table 7.
The pulse in the uptrend, 45%, was optimal.
Other indicators, the Super Bull Market [SBM], starting in Mar 2009 and the Great Expansion [GE], started in Jun 2009 are still with us, as of Apr. 26 [F].
The Market Perspectives
Friday (May 3) the New York Fed Staff Newscast released 2.2% in Q2, 2024. News from this week’s data releases decreased the estimate by 0.5%. Negative surprises from international trade, and the ISM manufacturing survey data, were the causes of the decrease.
Early Friday, the Labor Department said Nonfarm Payrolls [NFP] increased 175,000 during April, down from an upwardly revised 315,000 in March and the smallest monthly increase since last October. Payrolls dropped short of expectations for a gain of about 250,000. Additionally, average hourly earnings rose just 0.2%, below expectations for a 0.3% gain—it’s an encouraging sign on inflation.
Treasury yields decreased sharply as bond traders priced in expectations the Fed may cut benchmark rates earlier in the year than previously thought. The 10-year Treasury fell to 4.50%, its lowest level in over three weeks.
Conclusion
The pulse of the bull plateau was checked thoroughly by the SDI (the primary checker) as 47%, the TDI (the secondary checker) as 48%, and the uptrend as 45%, concluding the pulse is upbeat optimal, ranging 45% – 48%, which are much higher than the previous week.
As a consequence, the plateau is healthy enough to run 3 years more until 2007. Therefore, a “Bear Market” will replace the SBM in 2027, and about six months later, a “Recession” will replace the GE.
As a consequence, we will finally get the right business cycle chronology back, by getting a “bear market” as a leading indicator comes first, and then a “recession” as a coincident indicator follows.
This week TYC was improved with the increased flattener, by lifting the yields of long ends such as 30Y and 10Y, and little changes on 1M and 2Y in short end. The normalization of TYC well began on April 22, as predicted.
If you are a long-term (10 years or longer) investor, you may go with the “5YIP” (5-year-Investment Plan), recommending here.
