To The Moon

We saw trading volumes on the NYSE falling below average yesterday as the stock market closed with a mixed performance. All 3 major indices ended the session with little change from last week(05 Apr) close. This suggest that there is a lack of strong conviction among traders and investors.

As we are expecting key economic events later this week, the significant one would be the March Consumer Price Index (CPI) coming on Wednesday (10 April) and Producer Price Index (PPI) on Thursday (11 April), this might prompt for cautious trading.

Stable Short-Term Inflation Expectations

The Federal Reserve Bank of New York’s survey of consumer expectations revealed a stable short-term inflation expectations at 3.0% for the third month in a row.

We can see that the median median one-year-ahead inflation expectations remained unchanged at 3.0 percent, for three consecutive months (Jan to Mar 2024). According to the March Survey of Consumer Expectations, it was increased from 2.7 percent to 2,9 percent at the three-year-ahead horizon and decreased to 2.6 percent from 2.9 percent at the five-year-ahead horizon.

Source: New York Fed Survey Of Consumer Expectations

Upcoming Banking Earnings Stocks Gains

We saw significant gains from the banking sector, in particular JPMorgan Chase $Wells Fargo(WFC)$ and $Citigroup(C)$ in 08 April session. They are expected to report their Q1 earnings on 12 April (Friday), this might give some boost to investors looking at these banking stocks.

There are also some banking stocks which gave a good performance helping to lift $SPDR S&P Bank ETF(KBE)$ and SPDR S&P Regional Banking ETF (KRE, Financial) rising by 1.5% and 1.7%, respectively. Overall, the S&P 500 financials sector was among the top performers, increasing by 0.4%.

Interest Rates and Market Sentiment

Investor sentiment in stocks remained robust despite seeing rising market rates, U.S. 10-year Note Yield was up by four basis points to 4.43% and the US 2-year Note Yield was up by seven basis points to 4.80%.

The investor shift in market sentiment and behavior could be partly due to the rate cut expectations shifted and adjusted, also investors are cautious ahead of the Treasury auctions happening this week as well. The auction would include a $58 billion 3-year note auction on Tuesday, a $39 billion 10-year note auction on Wednesday, and a $22 billion 30-year bond auction on Thursday.

What To Look For Today (09 April) Trade

I would still be looking at the banking sector as the rate cut expectations has shifted, adjustment have been planned and made, whether these will be factor into the stock price, we will have to see.

The possibility of at least one rate cut in the second half of this year might still be there, another area to look at would be the crypto stocks, Bitcoin stayed above the $70,000 level at time of this writing.

So we could expect some upside from one of the more potential names in crypto stocks. $MicroStrategy(MSTR)$ $Marathon Digital Holdings Inc(MARA)$

Summary

I think with the expectations of rate cut shifting, traders and investors might be searching for the sectors which could be less affected by this movement. With the development happening and economic data releases happening this week, we should still see cautious trading, so investors might look at safe stocks.

Appreciate if you could share your thoughts in the comment section whether you think trading would remain cautious while market awaits the economic data for Wednesday and Thursday?

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.