Ignore the naysayers. This market is on fire!!! | Exchange places with Tom Bowley
Happy St. Patrick’s Day!
Last week was certainly interesting. Both the core CPI (Consumer Price Index) in February and the core Producer Price Index (PPI) in February exceeded expectations. Headline PPI number twice expectation. Nonetheless, the S&P 500 closed at a record high on Tuesday when February CPI data was released.
This bull market is still very resilient and provides evidence of this almost daily.
I think the majority of market analysts predicted that any weakness in Magnificent 7 stocks would automatically spell the end of this bull market. But they were wrong. NVIDIA Corp (NVDA) is the only stock in the Magnificent 7 to see significant gains over the past month. Price weakness in growth stocks typically occurs in the second half of a quarter (excluding the fourth quarter). Growth stocks tend to take a backseat to value. Especially when you compare it to what happens in the first half of the quarter as we move through earnings season.
Let’s take a look at Magnificent 7 stocks to get a better look at what’s happening there.
For each stock, the pink line represents the price movement and the black line represents the 10-day percent change (ROC). The prices of some of these names have fallen over the past few weeks, most notably Tesla (TSLA), which is down a whopping 19% during this period.
But the good news is that in these “risk-averse” types of markets, money doesn’t leave the stock market. Instead, it helps fuel massive rallies in other areas of the stock market, primarily value-oriented ones. This represents expanded participation in long-term bull market development, a key element of bull market sustainability.
This morning I created an ‘EB Weekly Market Recap’ (see below) which could become a regular YouTube weekend video. If you’ve heard, please contact us directly at “support@earningsbeats.com” or provide feedback below the YouTube video in the comments section. thank you!
EB Weekly Market Summary Video
Happy trading!
tom
Tom Bowley is Chief Market Strategist at EarningsBeats.com, a company that provides a research and education platform for both investment professionals and individual investors. Tom compiles a comprehensive Daily Market Report (DMR) to provide guidance to EB.com members each day the stock market is open. Tom has been providing technical expertise here at StockCharts.com since 2006 and also has a fundamental background in public accounting, giving him a unique blend of skills to approach the U.S. stock markets. Learn more
