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| |  | | March 28, 2024 | | Daily Notes Editor's Note: In observance of Good Friday, our InvestorPlace offices will be closed Friday, March 29, 2024. Since that means we won't have our Daily Notes tomorrow, we're sending this week's Roundup a bit early. Enjoy the holiday weekend! Dear Leah, Welcome to our end-of-the-week wrapup, where we break down the past week in "Daily Notes." What follows is a brief rundown of each day's notes, so you can quickly stay in the know. You can read each issue in full – including my “Idea of the Day,” Market Health Check, updates on our current model portfolio, and more – at your Innovation Investor subscriber site.
Monday, March 25 - Stocks opened up this holiday-shortened week on a flat note, thanks to widespread concerns about a potential short-term pullback; though our portfolios still rallied.
- Earnings look good enough to support the rally – 2024, 2025, and 2026 profit estimates are all rising strongly.
- Sentiment isn’t too stretched – the percent of investors bearish in the weekly AAII survey is ~30%, basically the same level it has been at for the past year.
- And overbought conditions are really only present in the large-cap tech stocks.
- Leading economists now see the economy growing by more than 2% this year, paced by a 2% jump in consumer spending and 150,000 new jobs created per month. They’ve also reduced their recession odds to just 35%.
- We issued a flurry of new stock picks last week. Some of them still remain below their Buy Up To prices.
You can read these notes in full here. Tuesday, March 26 - The macroeconomic fundamentals remain supportive of strengthening economic growth and rising stock prices through at least the rest of the year. Stocks will power higher over the next several quarters. But the gains will be uneven and skew in favor of smaller stocks.
- Rare five month “winter” winning streak for stocks suggests more gains are ahead. Since 1950, the S&P 500 has rallied every month from November to March just 11 other times. All 11 times, the market finished that year higher, with an average return of over 20%.
- The Philly Fed Services Prices Received index is pretty much just back to its average level since 2010. Therefore, we aren’t too worried about this spike. However, it is worth monitoring.
- Dovish inflation data out of Texas suggests that any reinflation we are seeing right now is largely localized and moderate in nature, which further suggests it isn’t worrisome… yet.
- Short-sellers are betting big that the current crypto rally won’t last, with total short interest in crypto stocks ballooning to $11 billion this year. Most of those short bets are against MicroStrategy and Coinbase. We think this potentially sets crypto stocks up for a big short-squeeze going into the Fourth Halving in April.
You can read these notes in full here. Wednesday, March 27 - We think the stock market is in a “holding period” until the Fed actually cuts rates. But once that happens – we expect in May or June – this market will wake up in a dramatic fashion, and stocks will likely skyrocket higher, much like they did in the last few months of 2023.
- Amazon (AMZN) is investing another $2.75 billion into AI startup Anthropic – yet another sign that the AI spending boom is only accelerating. So long as that remains true, AI stocks will remain the best bets on Wall Street.
- Biotech stocks look ready to take a big leg higher here with Treasury yields breaking down. Cryptos also look primed for a breakout higher. Plus, we’re growing increasingly bullish on consumer spending and travel stocks going into the summer.
- Recently, 10-year yields failed once again to conquer the 4.3% level and dropped below 4.2% on a strong Treasury auction. We think yields are maxed out.
- AI is proving to be a huge financial needle-mover in retail. We therefore remain bullish on retail stocks innovatively using AI to accelerate sales and profit growth.
You can read these notes in full here. Thursday, March 28 - The third revision of Q4 GDP numbers included a downward revision of the core GDP Price Index inflation rate for Q4 from 2.1% to 2%. The overall GDP Price Index inflation rate remained unchanged at 1.6%. And at just 1.6%, that rate is running well below its long-term average of 2.4%. The battle against inflation increasingly seems to be over, and a slight reinflation in the coming months is not a cause for concern.
- The University of Michigan also upwardly revised its March consumer growth expectations. The overall Consumer Sentiment Index was sharply increased from 76.5 to 79.4. These revisions positively reinforce a multi-quarter trend of rebounding consumer sentiment, which is historically consistent with multi-year bull markets.
- Pending home sales increased by about 1.6% month-over-month in February, marking a reversal from the ultra-depressed levels. This pattern closely resembles the turnaround seen in early 2010, just as the housing market was emerging from the Great Financial Crisis and entering a multi-year boom.
You can read these notes in full here.
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