On the last day of the month (March) and quarter (Q1), the S&P 500 Index (INDEXSP:.INX) is crawling to a close.
The NASDAQ Composite (INDEXNASDAQ:.IXIC) is at its highs, but diverging meaningfully from the Dow Jones Industrial Average (INDEXDJX:.DJI) and S&P 500.
Stock market breadth is running slightly positive (about 3/2) with Utilities, Real Estate, and Materials outperforming. That said, none of the 11 sectors are up much of anything on the day… and Energy, Financials and Healthcare are all lower as of this writing.
S&P 500 Futures Chart
The S&P 500 is heading into a tough area next month, but the bounce has held (thus far) and not turned back lower. Note that the near-term downtrend from early March is still in place…
A Look At Sectors, Yields, and Key Market Indicators
2 year treasury yields are dropping off pretty dramatically and this is causing some steepening in the yield curve. We’re not seeing much movement in the US Dollar Index today (fractionally negative).
Overall, the Energy Sector (NYSEARCA:XLE) is backing off after a sharp rally over the past week.
At current levels the S&P 500 would turn in just fractional gains for the month. But it’s notable that the index is up 5.75% for quarter. March could be chalked up as a sideways/consolidation period with lower treasury yields and a pullback in financials providing as headwinds. The Tech Sector continued to be a bright spot – it was the best performing sector for March, up 2.8% (and +12.47% for the Quarter).
A look ahead…
Overall, April is shaping up to be a volatile month given weakening market breadth and momentum. It’s also notable that the Tech sector has gotten very stretched. Until we have more clarity on which sectors can/will lead, expect bouts of volatility.
For now, the near-term downtrend from early March in the S&P 500 and Dow Jones remains in place. It should pay to be patient and selective.
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