As bond yields modestly pulled back, the bulls staged an exuberant celebration rushing back into stocks, suggesting inflation, rate increases, and the slowing economic reports no longer matter.  Perhaps we will find out this week as Powell testifies in Congress and the indexes deal with overhead resistance and the current downtrends.  Nevertheless, I suspect the big point price swings will continue, so plan carefully as we rally into levels that could harbor entrenched bears.  Enjoy the ride but be prepared for maybe a wild one!

Asian markets mostly gained overnight after China released modest economic growth targets over the weekend.  European markets trade mixed this morning with modest gains and losses after the Friday surge of buying.  However, U.S. futures appear a bit more unsure as we head to the open.  They currently suggest a very slight bearish open as they ponder the gravity of Powell’s pending testimony in Congress on Tuesday. 

Economic Calendar

Earnings Calendar

Earnings season is beginning to slow down, but we still have a relatively busy week of reports.  Notable reports for Monday include AVAV, CVGW, CIEN, RIDE, NTNX, TCOM, & WW.

News & Technicals’

A slew of foldable devices has hit the international market this year as electronics giants, mainly Chinese, look to catch up to Samsung in a smartphone category it pioneered.  However, analysts have questioned how big the foldable category can get, given the devices’ high price and lack of apparent uses right now.  Nevertheless, last month Chinese vendors Honor and Oppo launched their foldable smartphones. 

Sen. Mark Warner, D-Va., said Sunday he is introducing a broad bipartisan bill that will outline an approach to banning or prohibiting foreign technology like TikTok.  Warner said he is working on the bill with Sen. John Thune, R-S.D., and that he is concerned over the type of content Americans see on the platform.  Warner’s bill comes after the U.S. House Foreign Affairs Committee voted Wednesday to advance a bill granting President Joe Biden the authority to ban TikTok.

Veeva Systems announced in December that it would move its customer management software off of Salesforce’s platform and onto its home-brewed technology in 2025.  That will reduce revenue for Salesforce, which has contractually not been allowed to compete with Veeva in the life sciences sector.  On Wednesday, Veeva said it plans to demonstrate the technology in May. 

The bulls closed last week with an exuberant celebration as the bond yields subsided modestly.  The SPY and QQQ regained their 50-day moving average supports; however, they left the question of the overhead resistance and the current downtrend, as did the IWM.  We also have the complication of the DIA with a substantial overhead resistance of price and technicals that could serve as a bearish moving average squeeze.  Perhaps this week, we will find out if we can continue to ignore the economic slowdown and rising interest rates by breaking to new highs or if the bears have regrouped for an attack at resistance levels.  With the big point price swings of late, anything is possible as Powell heads to the hill to be grilled by Congress. 

Trade Wisely,

Doug