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Stock Market Update
31 Mins Ago
A recent market divergence could spell turbulence for stocks, warns BTIG.
BTIG has highlighted a unique technical signal that could indicate a pullback for stocks. Specifically, the Nasdaq 100 closed less than 5% below a 52-week high, while the Russell 2000 closed less than 5% above a 52-week low – a scenario that BTIG describes as “extremely rare.” Historically, this market divergence has not been a positive sign for the market, according to BTIG chief market technician Jonathan Krinsky.
Furthermore, after the latest consumer price index reading, Bryce Doty, a portfolio manager at Sit Fixed Income Advisors, suggests that the Fed appears to be justified in its interest rate cycle. The inflation data could prompt investors who were not convinced that the Fed was done with raising interest rates to rethink their position.
Tuesday’s rally saw the Technology Select Sector SPDR Fund (XLK) hitting an unprecedented high despite recent market upheaval. The ETF, which monitors technology stocks in the S&P 500, surged to an all-time high with a substantial increase in price, mostly driven by solar stocks.
1 Hour Ago
Additionally, the New York Stock Exchange saw 15 advancers for every decliner, indicating strong positive market sentiment. Furthermore, the Cboe Volatility Index (VIX) dropped to its lowest level since September following the softer-than-expected U.S. inflation report, suggesting reduced market volatility.
Oil prices saw an increase as U.S. inflation remained flat month-over-month and the International Energy Agency raised its crude demand forecast. This shift resulted in a rise in both Brent and West Texas Intermediate crude contracts. Moreover, market confidence in the Federal Reserve’s intended course of action has led to almost no chance of an interest rate hike this cycle.
Amidst these developments, stocks opened higher on the news of October’s CPI coming in lower than expected, signaling low inflation pressure. An exciting time for investors indeed.
