To The Moon

1.Major Indexes Returns

The major US indexes traded in a narrow range for the second week in a row. The $S&P 500(.SPX)$ and the $DJIA(.DJI)$ both added around 1% to record their fourth positive week out of the past five and the $NASDAQ(.IXIC)$ generated a fractional gain.

The $Cboe Volatility Index(VIX)$ that measures investors’ expectations of short-term U.S. stock market volatility fell for the 4 week in a row.

As of last Friday, the$Straits Times Index(STI.SI)$ gained 1.28% last week and$S&P/ASX 200(XJO.AU)$ gained 1.98% weekly.

Currently, whether the U.S. central bank is ready to pause on rate hikes and will there comes recession became a central debate.

If the U.S. central bank is ready to pause on rate hikes, could shape the narrative across markets, including commodities, for the foreseeable future as inflation and recession prospects counteract the demand for raw materials such as oil and gold.

The question is will the stock market definitely fall when the economy is in recession?

Welcome to read: BAC: When Comes Recession, US stocks may Welcome a "Perfect Low" to Buy In a Decade

What’s more, Among the 15 economic recessions after the war, the stock market fell 9 times in the year of economic recession, but grew in 6 times. It is contrary to most people’s intuition. In the past two years, 13 out of 15 times were growths, the median growth rate was 11.7%, and only two times were declines. The most important indicator for observing a recession is corporate earnings, and the stock market has historically rebounded strongly when the Fed's monetary policy shifts.

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

From the perspective of sectors, the energy, raw materials, and financial sectors were the top three gainers last week.

On last Friday, the three major U.S. banks $JPMorgan Chase(JPM)$ , $Wells Fargo(WFC)$ , and $Citigroup(C)$ all reported beautiful report cards, all achieving double beat performance in revenue and earnings per share. The earnings reports of the three banks confirm that the storm brought about by the bankruptcy of Silicon Valley Bank is a crisis for small banks and an opportunity for big banks: the inflow of customer funds is higher than that of other customers seeking more High-yield outflow of funds.

The top 10 winners of$S&P 500(.SPX)$ are $Techne Corporation(TECH)$, $Pioneer Natural Resources(PXD)$ , $Enphase Energy(ENPH)$ , $JPMorgan Chase(JPM)$ , $Citigroup(C)$ , $CarMax(KMX)$ , $CF实业(CF)$ , $Mosaic(MOS)$ , $Molson Coors(TAP)$ , $Ralph Lauren(RL)$

Overall, roughly 30 S&P 500 companies have reported first-quarter earnings, with 90% of them beating estimates, per FactSet.

3. Macro Factors and Other Assets

Earnings launch: Each of the four major U.S. banks that reported Q1 results gains relative to the same period a year earlier. However,analysts were forecasting that earnings for all companies in the $S&P 500(.SPX)$ fell by an average of 6.5% overall—the biggest earnings decline since the second quarter of 2020, according to FactSet.

Inflation moderation: The U.S. CPI fell to a 5.0% annual rate in March from 6.0% the previous month, bringing inflation to the lowest level in nearly two years. A separate report showed that wholesale inflation as measured by the PPI fell to 2.7%—the lowest in more than 2 years and down sharply from a 4.9% annual rise in February. 

Bond yields rebound:Yields of government bonds rose, regaining some of the ground they lost in a sharp decline in early March amid fears about bank liquidity. On Friday, the yield of the 10-year Treasury bond was around 3.52%—up from 3.29% a week earlier, but down sharply from a recent peak of 4.07% on March 2.

Bitcoin rally: The price of Bitcoin, the most widely traded cryptocurrency, eclipsed $30,000 on Tuesday for the first time since June 2022. As of Friday, the price was around $30,400—up from just under $20,000 as recently as March 10. 

4.The week ahead: 17-21 April

The corporate earnings season kicks into high gear this week, with investors looking for more clues on the health of corporate America. Among the big tech leaders, $Microsoft(MSFT)$ , $Tesla Motors(TSLA)$ , $Amazon.com(AMZN)$ , $Alphabet(GOOG)$ , and $Meta Platforms(META)$ will release their first-quarter financial reports one after another. $Netflix(NFLX)$ , $Goldman Sachs(GS)$, $Procter & Gamble(PG)$ will also release earnings results.

Key events the coming week:

Monday

Housing Market Index, National Association of Home Builders 

Tuesday

• Housing starts, U.S. Census Bureau

Wednesday

• No major reports scheduled 

Thursday

• The Conference Board Leading Economic Index for the U.S

• Existing home sales, National Association of Realtors

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

Friday

• No major reports scheduled  

How is your trading plan in this week？

Any special focus？

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