By any measure it was a great day for the US stock market but I’m going to highlight some of the negatives anyway. But first, here are the closing changes:
- S&P 500 +1.6%
- Nasdaq Comp +3.1%
- Russell 2000 +0.9%
- DJIA +0.9%
The Russell 2000 hit a record but it closed near the lows of the day. That’s not great price action in a part of the market the benefits most-directly from lower oil prices and a healthier consumer. Much of the heavy lifting today was done by the Nasdaq and that hasn’t been a war trade for awhile. Instead, it looks like it’s being driven by SpaceX-inspired FOMO and the ongoing mania in memory names. Two of the top performers were Micron and Western Digital, both up double digits.
Beneath the surface, there were some good post-war trades with travel names, Booking and Expedia up strongly, though neither closed at the highs of the day. Airline shares also gave up about half of their opening names.
The oil chart worries me a bit as we finished inside of the opening gap and at the highs of the day. WTI fell as low as $79.70 but finished at $81.40. Maybe that’s just deal angst as Israel continues to strike Lebanon but it could also mean the ‘peace’ trade was hugely front-run and now we’re in for profit taking.
Similarly, the euro is finishing up the day only 19 pips and the yen is lower on the day. Those are two big oil importers and they’re not getting any kind of lift
