The Bear Den by Shortside Jonny
Monday, March 8, 2021 – DIA 318.25 +.95%, QQQ 299.94 -2.83%, SPY 381.72 -.50%
No high-impact data released. Equity markets continued to trade in lockstep with interest rates. As 10-year yields moved higher the NASDAQ came under increasing pressure. The 10-year index (TNX) closed at 15.96 +.42. (This is a yield of 1.596 up 4.2 basis points on the day). The rotation was evident throughout the day as Basic Materials (XLB) 76.50 +1.34%, and Financials (XLF) 34.14 +1.28% outperformed, and technology (XLK) 125.83 -2.42% was sold and underperformed. Cisco (CSCO) 47.51 +2.72% bucked the downdraft in technology continuing an advance that started with a JPMorgan upgrade back on March 5th who put a $55 price target on the stock. Ross Stores (ROST) 120.37 +6.40% announced its intention to open 60 new locations in fiscal 2021. Baidu (BIDU) 232.68 -11.10% was the hardest hit in the Nasdaq 100. Since Feb 22 it has corrected 36%. The crowdsourced short squeeze play GameStop (GME) 191.35 +41.21% continued its second major run on news that a Chewy.com cofounder would lead the digital sales effort.
Tuesday, March 9, 2021 – DIA 318. +.11%, QQQ 311.77 +3.94%, SPY 387.17 +1.43%
No high-impact data released. Equity markets reacted the exact opposite of Monday’s action. The 10-year index (TNX) 15.46 - .50 (5 basis points) or -3.13%, sparking a huge rally in Consumer Discretionary (XLY) 162.94 +3.78% and Technology (XLK) 130.05. GameStop (GME) 247.90 +26.94% continued to rally. Tesla (TSLA) 673.58 +19.64% spiked after taking a breather over the past few weeks. DocuSign (DOCU) 213.22 +10.57% continued to rally into their earnings release on Thursday 3/11.
Wednesday, March 10, 2021 – DIA 323.33 +1.48%, QQQ 310.88 -.29%, SPY 389.58 +.62%
Consumer Price Index (ex-food & energy) came in better +.1% v. +.2% expected. CPI core MoM came in at .4% and YoY 1.7% both as expected. Equity markets were mixed on the day with the tech-heavy NASDAQ consolidating and the Dow Industrials advancing. Energy (XLE) 53.44 +2.53%, and Financials (XLF) 34.52 +2.04% led the day, with Technology (XLK) 129.59 -.40% as the laggard. Boeing (BA) 245.34 +6.39% in a clear uptrend since 1/25 continued its advance clearing a 4 month high. Walgreen’s Boots Alliance (WBA) 50.52 +4.25% advanced on reports that the company has administered upwards of 5mm doses of COVID-19 vaccines. On the downside Semiconductor equipment shares were hit across the board, Lam Research (LRCX) 518.7 -4.56% was sold along with KLA Tencor (KLAC) 283.45 -3.62% The day's moon shot Aveo Oncology (AVEO) 15.28 +89.11% announced the approval of FOTIVDA a drug for relapsed or refractory advanced renal cell carcinoma.
Thursday, March 11, 2021 – DIA 325.33 +.62%, QQQ 318.04 +2.30%, SPY 393.53 +1.01%
Initial Jobless Claims were reported inline but still elevated levels 712K v. 725K expected. Continuing Jobless Claims came in slightly better than expected at 4.144M. Even though the NASDAQ was the best performer on the day, it still lagged the S&P 500 and the Dow Jones Industrials which both hit all-time highs again. Technology (XLK) 132.36 +2.14% continued to rally along with Communications (XLC) 74.90 +1.89%. The broader market traded less tethered to interest rates as the Ten Year Index (TNX) rose 15.27 +.07 on the day, which in recent trading has shown a negative correlation. Freeport McMoRan (FCX) 37.47 +8.73% popped on a bullish Bloomberg article on copper prices. The stock recently pulled back and appears to be reasserting. A recent short squeeze name, Siebert Financial (SIEB) 5.87 +36.51% came with earnings and showed progress on a number of fronts.
Friday, March 12, 2021 – DIA 328.31 +.92%, QQQ 315.46 -.81%, SPY 394.21 +.13%
The Consumer Sentiment Index came in at 83 far better than the 78.5 expectation, Producer Price Index Ex-Food & Energy came in slightly better than expected at 2.5% Interest rates moved higher as measured by the 10-Year Note Index (TNX) 16.35 +1.08. Stock rotation from growth into value was evident throughout the day, as optimistic news that the pandemic may one day soon be behind us. With interest rates climbing, growth sectors such as Technology (XLK) 131.41 -.72% are taking a breather and underperformed today while sectors such as Real Estate (XLRE) 39.03 +1.72% performed well. Boeing (BA) 269.19 +6.82% continued higher after announcing new orders for their 737-max jet. Caterpillar (CAT) 229.00 +4.20% moved higher on the COVID-19 relief bill. ULTA Beauty (ULTA) 318.15 -8.45% missed on earnings.
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