Weekly: After Tech's Q1, How Will You Trade a Strong April Market?

1. Tech’s quarter

The major U.S. stock indexes added more than 3% on last week. Despite the eruption of stress for U.S. banks a year into the Fed's rate hikes, indexes post gains in March and recovering more of the ground lost in a difficult February.

Data from Tiger Trade

What's more, the major U.S. stock indexes see big divergence in Q1 2023:

The $NASDAQ(.IXIC)$ posted a 17.0% quarterly total return, best quarter since the 2020,owing in part to its relatively large weighting in technology stocks that recorded strong quarterly performance.

The $S&P 500(.SPX)$ added 7.5% for the quarter while the $DJIA(.DJI)$ was up 0.38%. As of last Friday, the $Straits Times Index(STI.SI)$ gained 1.44% weekly and$S&P/ASX 200(XJO.AU)$ gained 3.2% weekly.

Other Assets Performances in Q1 2023:

• Bitcoin rose 58.6% in Q1 2023, Dollar $USD Index(USDindex.FOREX)$ still with -0.9%.

• Gold price $Gold - main 2306(GCmain)$ is rising: With the rise of risk aversion, the central bank and investors are joining the army of gold buyers. After breaking through 2,000 US dollars, the historical high is no longer out of reach. Experts are still optimistic about the long-term trend of gold.

• Treasury yields edge lower as still-high inflation puts focus on Fed rate hikes, and government bonds see 2.8% in Q1.

• Natural gas is among the worst-performing commodities in the first quarter, while steel, iron ore strengthen

For April expectations, stocks should continue to move higher in April.

Historically, April is one of the strongest months of the year for the S&P 500.

Since 1928, the $S&P 500(.SPX)$ has had an average monthly gain of 1.4% for April, according to an analysis by Yardeni Research. That makes April the second-best month for the index in that period, with July taking the lead at 1.7%.

Narrowing the frame even further, we’ll see that April has been the strongest performing month since 2002 and the second-strongest since 2012, according to LPL research from last March.

Source:https://www.nerdwallet.com/

2. Sectors and Stocks of $S&P 500(.SPX)$

According to the table below: The top 3 sectors with the highest gains in March are Technology, communication services, and Utilities. The entire Q1 technology sector rose 21.25%, communication services rose 17.15%, and consumer cyclical rose 14.68%.

Source: https://finviz.com/

With the suspension of interest rate hike expectations and the expectation of interest rate cuts, technology stocks that are sensitive to interest rates may face smaller headwinds.

In terms of specific stocks: large-cap stocks $Microsoft(MSFT)$ rose 19.62%, $Apple(AAPL)$ rose 27.23%, $Alphabet(GOOGL)$ rose 17.27%, $META rose 76.23%, $Amazon.com(AMZN)$ rose 22.7%, and Tesla rose 70.3%.

Data from Tiger Trade

Here are a few key banks to watch, along with the release date of their earnings reports in April:

$First Republic Bank(FRC)$ : April 12 ; $Wells Fargo(WFC)$ : April 13 ; $JPMorgan Chase(JPM)$ : April 14 ; $Citigroup(C)$ : April 14 ; $Charles Schwab(SCHW)$: April 17; $Bank of America(BAC)$ : April 18 ; $Morgan Stanley(MS)$ : April 19

Another group of big tech companies will release their Q1 2023 earnings reports in April:

$Netflix(NFLX)$ : April 18 ; $Microsoft(MSFT)$ : April 25 ; $Alphabet(GOOG)$ : April 25 ; $Meta Platforms, Inc.(META)$ : April 26 ; $Apple(AAPL)$ : April 27 ; $Amazon.com(AMZN)$ : April 27

Finally, the following mega-cap companies will also release Q1 earnings reports this month:

$Taiwan Semiconductor Manufacturing(TSM)$ : April 13 ; $Tesla Motors(TSLA)$ : April 19; $Procter & Gamble(PG)$ : April 21; $Coca-Cola(KO)$ : April 24

3. Macro Factors

The liquidity crisis is on hold: The Fed's balance sheet expanded by $370 billion in March. This level of liquidity injection is even comparable to the 2008 financial crisis.

Calming Market: $Cboe Volatility Index(VIX)$ , which measures investors' expectations for the stock market over the next 30 days. A plunge in value means investors are feeling secure and calm about the market’s future.

Yields of U.S. government bonds rose:snapping a string of three consecutive weekly declines.

U.S. inflation moderates:the Personal Consumption Expenditures Price Index showed that the U.S.Fed’s preferred gauge for tracking inflation rose 0.3% from January to February, down sharply from the 0.6% rate in the previous monthly update. On an annual basis, the PCE Price Index rose 5.0%, down from the prior month’s 5.3% figure.

Consumer worries:A gauge of U.S. consumer sentiment fell sharply, recording the first decline in four months.

4. The week ahead: April 3-7

A labor market update due out on Friday will show whether the strong jobs numbers recorded in recent months extended into March.

The most recent report showed that the U.S. economy generated 311,000 new jobs in February—above most economists’ expectations but below January’s gain of 504,000.

Monday

• Institute for Supply Management’s manufacturing index

• Construction spending, U.S. Census Bureau

Tuesday

• Job Openings and Labor Turnover Survey, U.S. Bureau of Labor Statistics

• Factory orders, U.S. Census Bureau

Wednesday

• ADP National Employment Report, ADP

• Institute for Supply Management’s nonmanufacturing index

• Trade balance, U.S. Census Bureau

Thursday

• Weekly unemployment claims, U.S. Department of Labor

Friday

• Jobs and unemployment, U.S. Bureau of Labor

• Consumer credit, U.S. Federal Reserve

• U.S. financial markets closed for Good Friday holiday

How is your trading plan in this week？

Any special focus？

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