Market Action Summary: 3/11/19


S&P 500 Overview: Upward momentum appears intact

  • Index bounces at 200-day MA after pulling back from 2800.
  • Fear indexes like VIX, gold and yen refusing to rally.
  • Watch for breakout from tight range, possibly on Brexit clarity.

Economy Refuses to Quit

  • January retail sales beat, with housing-related strong.
  • Non-farm payrolls missed, but non-cyclical areas like healthcare/education/government led the weakness.
  • January housing starts & building permits better than expected.
  • ADP private-sector payrolls about inline, with big upward revision for January.
  • Jobless claims fall back below estimates.

Is Bad News Good?

  • ECB slashes economic growth forecast.
  • China stumbles but doesn’t appear to be falling.
  • The result could be rates lower for longer, which is seldom bearish.
  • Watch Chinese data on Wednesday night.

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Backdrop May Favor Growth Stocks, Small Caps

  • Low rates often support higher-multiple stocks.
  • M&A may increase, which favors small companies as potential targets.

Post Earnings Pullbacks

Russell’s Watch List:

  • Biotechs (IBB, XBI) bouncing after Gottlieb selloff.
  • Facebook (FB), Apple (AAPL) escaping recent range.
  • Yandex (YNDX): Ever heard of Uber copycat Taxi?
  • Lululemon (LULU), Cliffs (CLF) holding 50-day MAs.
  • India (EPI) running into April-May general elections.
  • Watch for homebuilder ETF (ITB) to potentially break range, especially with new-home sales on Thursday.
  • Big pharmacy names (CVS, WBA, TEVA) potentially in distribution.

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David Russell is Global Head of Market Strategy at TradeStation. 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.