Mar 156 min
Updated: Mar 16
by Ben Weiss, for the Call to Leap Team
Happy Friday, everyone! And Happy St. Patrick's Day this weekend! If you're celebrating, may your holiday be filled with lots of green—our favorite color here at Call to Leap! 📈🤑 Whatever you're doing this weekend, be safe and have fun!
But first, let's take a look at what happened this week and what's coming up...
The market this week
Well it certainly was a choppy week, with a mixture of news and market movement. As has been the case recently, the Magnificent 7 stocks were a split decision again this week. GOOGL saw a healthy retracement from it's recent slide, and AAPL seemed to halt its decline by finding downward resistance support around the $170 level as it has tended to historically.
Following their recent aggressive uptrends, chip manufacturers NVDA and AMD both cooled off considerably this week, showing at least a pause in their bull runs. I'm interested to see if investors are merely taking a badly needed breather before continuing upward or if we are witnessing the beginning of a trend reversal.
By the numbers, the S&P 500 (+0.10%), Dow Jones (+0.12%), Nasdaq (-0.49%), Russell 2000 (-1.75%) all had a mixed week and finished mostly flat in the end.
Did you know?...Invesco QQQ, a community favorite ETFs to buy here at CTL is celebrating its 25th birthday this week 🥳🎁 As one of America's most popular ways to invest in growth stocks, the ETF now manages about $250 billion of investors' money making it the 5th largest ETF in the US. Can you guess #1 through 4? I'll give you a hint: we talk about them frequently in Discord!
In the news
Hot or not?...Inflation data was back in the news this week, leading to much of the choppiness we saw in the market. We received February data for both CPI (Consumer Price Index—what you and I pay for goods and services) and PPI (Producer Price Index—what producers are selling goods and services for). Both indices provide valuable insight into the macroeconomic effort to tackle inflation. This data is especially timely as the Federal Reserve (or "Fed") will hold their next policy meeting this coming week, where they are sure to discuss the outlook for lowering interest rates this year. Stay tuned to hear any informative comments from Chairman Jerome Powell.
CPI data showed consumer prices rose 0.4% in February, inline with the consensus expectations. Year-over-year (YoY) prices rose 3.2%, which was slightly higher, or "hotter", than expected. Later in the week, PPI data showed whole prices rose 0.6% in February, about double the 0.3% experts were anticipating, and 1.6% YoY. These rises, while slight by themselves, demonstrate that tackling inflation is neither quick nor does it follow a straightforward path. Gas and home rental prices were among the categories that increased the most. The macro view shows continued progress combating inflation, but it appears it may take a "two steps forward, one step back" path.
Acrobat-ic earnings...While we wait for major earnings season to roll back around in about a month, we did received earnings results and forecast from software company Adobe (ADBE) on Thursday. The company exceeded expectations for both earnings per share (EPS) by +2.3% and top-line revenue by +0.8%, however delivered a "soft" forecast for sales ahead, driving investors to sell of the stock over -14% today. As we hear about a lot these days, investors voiced concerns about ADBE's efforts with artificial intelligence (AI) as well as competition the company faces in the software sector.
TikTok, you don't stop...Chinese technology company ByteDance, owner of the massively popular social media platform TikTok, is under increasing pressure from the US Congress, This week, the House of Representatives, in a show of overwhelming bipartisan cooperation, passed legislation to effectively ban the app from US app stores, citing mounting data security concerns. The bill moves next to the Senate for consideration. Congress has suggested that ByteDance could sell the platform to a US-based owner and avoid a complete ban. With 150 million active users in America (and 1 billion globally), I'll be very interested to see how this widely impacting situation is resolved.
Starships were meant to fly...Lastly, I would be remiss if I didn't mention rocket manufacturer SpaceX and their monumentally successful flight test yesterday morning. IFT-3 (their third Integrated Flight Test) showcased a rocket booster and space ship combination, together referred to as "Starship", launching from Boca Chica in South Texas to test its ability to fly into low-Earth orbit and re-enter through the Earth's atmosphere. With many successes accomplished and even more challenges left to solve, SpaceX has managed to launch the largest man-made object ever to reach space, standing nearly 400 ft tall and 30 ft wide—nearly twice the size of a double-decker Boeing 747 jetliner.
SpaceX is not publicly traded on the stock market, however many of their suppliers and competitors in the aerospace industry are (think: Boeing, Lockheed Martin, Airbus). If you're not a rocket scientist (I know I'm certainly not), SpaceX is certainly a name to familiarize yourself with, as the company will surely only continue to grow.
SPY
On the daily charts for both SPY and QQQ here, you'll see two sets of channel lines (orange and green). I continue to observe a secondary, steeper bullish trend which the indices seem to be following. The skinnier, steeper green channels appear to be narrowing or "consolidating" so I'll be watching to see if the indices breakout in either direction from the channel lines.
Also, as our green channel lines predicted, SPY appeared to bounce down off the upper bound and sell off some, keeping price action within the channel we've drawn. Conversely, QQQ appeared to drop just below the support of the lower channel bound we've drawn. I'll be curious to see if QQQ obeys this lower support or will continue to fall through the lower support, signaling a possible trend reversal.
Do you agree with how I drew my lines or do you see it differently? Let's chat on Discord!
QQQ
You got this, everyone! Stay disciplined, pay yourself first, and always invest in your greatest asset—yourself. As always, let us know if you have any questions. 🙌🏻
-Ben and Steve
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