An ugly quarter ends on a positive note


Have we finally bottomed? That’s likely to be the question as traders return to their desks today.

The S&P 500 rose 2.1 percent between Friday, March 23, and Thursday, March 29. The bounce followed a jarring drop of almost 6 percent the preceding week as the index slammed to its 200-day moving average and an old peak from November. But it held, and now the first losing quarter  in 2-1/2 years is history.

The holiday-shortened week began with a flight to safety as investors cowered in utilities and consumer staples. But sentiment seemed to shift over the course of Thursday morning, and money came back to riskier sectors like transports, emerging markets and energy.

Even technology caught a bid. That’s a big deal because negativity toward the group plagued investors for much of the month. Facebook (FB) was the main culprit with its user-data scandal, although (AMZN) took a hit from presidential attacks. Apple (AAPL) faced iPhone worries, debt anxieties shook Tesla Motors (TSLA) and a delay in self-driving car development weighed on Nvidia (NVDA).

Those headlines might have been jarring in the short-term, but the longer-term news flow was still positive. Employment remains strong on both sides of the Atlantic, while pending home sales and house prices suggested real-estate is on the mend into the spring. Perhaps most surprising were signs of smoother geopolitical tensions — barely a week after pundits hollered about a “trade war” with China.

Despite the market having a strong close, no company in the S&P 500 managed a double-digit move. Apparel and retail names Macy’s (M) and PVH (PVH) were the index’s top performers with gains of 9 percent and 8 percent. There was no news on M but PVH advanced on the heels of a strong quarterly report.

Advanced Micro Devices (AMD) led to the downside with a 5 percent drop amid worries about a cryptocurrency slowdown. Baker Hughes (BHGE) and AMZN vied for the second-worst spot with declines of about 4 percent.

Another interesting development last week: Interest rates continued to fall. Click here for more on that.

Attention now turns to the broader economy as the second quarter gets under way. Today’s big items are the Institute for Supply Management’s manufacturing index and the Commerce Department’s report on construction spending.

Tomorrow doesn’t have much economic data, although Spotify Technology (SPOT) will hold an initial public offering without the help of Wall Street underwriters.

Monthly jobs data follows Wednesday morning when ADP publishes its tally for the private sector. Mortgage applications, factory orders, ISM’s service index and crude-oil inventories are also due.

Jobless claims are the main item Thursday, and the week concludes with the Labor Department’s non-farms payrolls report Friday morning.

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David Russell is VP of Market Intelligence at TradeStation Group. Drawing on nearly two decades of experience as a financial journalist and analyst, his background includes equities, emerging markets, fixed-income and derivatives. He previously worked at Bloomberg News, CNBC and E*TRADE Financial. Russell systematically reviews countless global financial headlines and indicators in search of broad tradable trends that present opportunities repeatedly over time. Customers can expect him to keep them appraised of sector leadership, relative strength and the big stories – especially those overlooked by other commentators. He’s also a big fan of generating leverage with options to limit capital at risk.