Rate Cuts, Sector Trends, and Momentum Picks

March 24, 2024 - Update

Here is my review for the week.

1. Macro

• Oil Prices (Brent): -0.6% (good, to be watched closely)

• Liquidity (M2): neutral to restrictive

• 10 Year treasury yield: -2% for the week (good, to watch closely)

• Inflation nowcast for Feb 24: 3.37% (bad vs. 3.17% from Jan24)

The most important news from the week was the neutral to dovish tone of the FED chairman who still sees 3 rate cuts before the end of 2024.

We don’t want to see energy prices and then inflation picking up again which might result in a significant market correction.

The US economy looks robust until proven otherwise.

2. The Market

Below is the weekly chart of the Nasdaq that looks healthy in all regards:

Price is above all moving averages and rising.

When looking at my indicator for the health of the market, after a deterioration for 2 consecutive weeks, the index is back at 100/100 points, indicating a str…