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“Birds scream at the top of their lungs in horrified hellish rage every morning at daybreak to warn us all of the truth, but sadly we don’t speak bird.” – Kurt Cobain

Morning stock market summary

Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.  

Futures have been attempting to recover from yesterday afternoon’s sell-off.  International indices are sharply lower as they were closed before the selling got underway here.  Where the market finishes today will hinge in large part on the March employment report which just hit the tape.  Non-farm payrolls came in stronger than expected at 303K versus forecasts for an increase of 214K. The Unemployment Rate was right in line with forecasts at 3.8% as was average hourly earnings which increased 4.1%. The average workweek was modestly longer than expected at 34.4  hours vs. forecasts for 34.3. In reaction to the report, equity futures sold off a bit, and yields increased with the 10-year just under 4.4%.

In yesterday’s Closer, we provided a detailed discussion of Thursday’s reversal in the Nasdaq including its potential drivers (When you boil it down can anyone ever really definitively tell you what the actual cause of any market move is?).  This morning, we wanted to take a wider-angle view and look at every time since 1989 (as far back as we have intraday Nasdaq data available) that the Nasdaq experienced a similar reversal to yesterday.

Since 1989, there have been 122 prior days where the Nasdaq was up 1% intraday and finished the day down over 1%.  As mentioned last night, many of these days have tended to occur during bear markets. After all, it’s more common for rallies to run out of steam during bear markets than bull markets.  When you don’t tend to see these types of reversals is during a bull market when the Nasdaq is right near 52-week highs.

There have now been just ten days since 1989 when the Nasdaq was up 1% intraday and finished the day down 1%.  As shown in the chart below, two of those days were in early 1999, a year before the peak of the dot-com bubble.  Another two occurred in early 2020, including one on 3/7/00, just three days before the Nasdaq’s intraday peak of that era. The next two occurrences were in 2003 as the market was coming out of the bear market from the internet bubble. After those two days, there were no other reversals of a similar magnitude for seventeen years (7/13/2020 and 11/9/2020), and before yesterday, the most recent occurrence was less than a month ago on March 8th.  Is it just us, or does anyone else find it weird that these reversals tended to come in pairs?  In every year where there was a reversal, there was always another and not a single more.

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