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“We so often look so long and so regretfully upon the closed door, that we do not see the ones which open for us.” – Alexander Graham Bell
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
Well, at least it’s March. Anyone with a net long position in the stock market was happy to see February end. Although the S&P 500 finished the month down just 1.42%, the Nasdaq was hit with a decline of just under 4%, and nearly all of it came last week as the index declined 3.5%. Remember, it was only seven trading days ago that the S&P 500 closed at a record high!
This morning, equities are looking to build on last Friday’s gains as investors await the release of the February ISM Manufacturing report. In Europe, the STOXX 600 kicked off the week with gains of close to 1%, driven by a 2%+ rally in Germany. Manufacturing PMI readings for the region generally came in better than expected, but the rally in Germany has also been driven by a 10%+ rally in defense contractor Rheinmetall based on expectations that the EU will increase military spending to support Ukraine.
Getting back to last week’s trading, it was mostly positive at the sector level. As shown in the snapshot below, just four out of eleven sectors finished the week in the red. Technology (XLK) was the big loser, falling close to 4%, along with Utilities (XLU), which fell 1.3%. The two other sectors to finish lower were Communication Services (XLC) and Consumer Discretionary (XLY), which each shed around 1%. The losses in these two sectors were driven by mega caps like Tesla (TSLA) and Amazon.com (AMZN) in the Consumer Discretionary sector and Alphabet (GOOGL) and Meta Platforms (META) in the Communication Services sector. Besides these four sectors, most others were up at least 1%, including Financials (XLF) and Real Estate (XLRE), which gained over 2% each.
Relative to their short-term trading ranges, nine out of eleven sectors remain above their 50-day moving averages (DMA), but then there’s Consumer Discretionary and Technology, which both remain at oversold levels.
