I mistakenly thought the word was on tender hooks, like tenterhooks,’ meant a side of beef hanging in a freezer or on a vast metal hook. 

The back-and-forth nature of yesterday’s session reveals the market was ‘on tenterhooks.’ However, there is also a reserve of buyers looking to pounce when it seems the crowd bum-rushed the exits. The real wildcard these days isn’t the buyers but seducing the chasers into the game.  Enough took the bait yesterday to lift eight of eleven sectors in the S&P 500.

Heat Map and Market Direction

Yesterday's Heat Map was peppered with green, but the most crucial stock in the market was bright red.

Outside of Nvidia (NVDA), the rest of the “Mag Seven Stocks” were held up except for Amazon (AMZN) and Meta Platforms (META) (all were in the batter’s box to post financial results).

Changing Lanes

Major large equity indices were already in short-term downtrends, and now the Russell 2000 has shifted into a middle-term downtrend.

Keep on Truckin,’ Baby

In the 1970s, this phrase and hit song meant to keep doing your thing. It was an upbeat and positive message.

Yesterday, the truck stocks were truckin’ in the wrong direction:

• Wabash National Corp (WNC)
• J.B. Hunt Transport Services (JBHT)
• Knight-Swift Transportation (KNX)
• Old Dominion Freight Line (ODFL)

Bad news from a top trucking organization tripped up trucking stocks, but the same organization tried to put a happy face on the news (must be a 1970s baby).

 

After the Close

Speaking of being ‘on tenterhooks,’ after-hours trading action was ugly for the “Mag Seven Stocks” and other would-be Artificial Intelligence (AI) players.

I do not worry a lot when insiders sell stock, but it raises a yellow flag when they begin selling billions of dollars in a short period.

Then They Came for the Generals

Over the past month, the joke has been about how the “Magnificent Seven” has narrowed down.

First, it was whittled down to five names, as Google (GOOG) and Apple (AAPL) were kicked to the curb.

Then, four names, some called “The Fantastic Four.”

Then there were three.

And going into the close, there were only two (see chart).

Last night, Meta Platforms (META) posted its financial results, which were fine. Still, Mark Zuckerberg must have removed his goggles and saw what Artificial Intelligence (AI) was doing, and now they are jumping on the bandwagon. Zuckerberg has a lot of Street cred for his maturation and for bringing FB/Meta out of the abyss.  But he will not be able to charm his way on this, at least not right now.  The stock was down 13% in after-hours trading.

Tomorrow, there will only be one (for now).

Today’s Session

First Quarter GDP disappointed, coming in at 1.6% against a consensus estimate of 2.4%.  The pace of growth will force the pom-pom crowd to take a more severe look at inflation.

But the real shocker was the prices. Economists made excuses for persistent inflation pressures, and many dismissed the notion of sticky inflation.  These numbers are sobering.

• PCE +3.1% consensus +3.0%
• Core PCE +3.7% consensus +3.4%

Now, the stagflation camp is gaining momentum.  The cure would be to cut off the fiscal spigot or wait for consumers to tap out.

 

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