As markets trade this shortened week, the SYP 500 (SPY) will return around 10% for the first quarter. Investors will watch Super Computer Micro (SMCI) and Dick’s Sporting Goods (DKS), two of the new additions to the index.
Look out for light selling pressure on the top five stocks by YTD return. They are Nvidia (NVDA), Constellation Energy (CEG), Meta Platforms (META), Micron (MU), General Electric (GE), and Marathon Petroleum (MPC).
Worst Performers
Fund managers will sell shares in the worst-performing companies to hide their poor picks in the quarter. Those include SolarEdge Technologies (SEDG), Boeing (BA), Tesla (TSLA), Warner Bros. Discovery (WBD), and MarketAxess Holdings (MKTX).
Q2 Outlook
The stock market has the momentum to price in no fewer than three interest rate cuts in 2024. Even if The Fed delays monetary easing, the slowing in quantitative tightening would ease credit conditions. The central bank believes that the loose conditions would not re-ignite high inflation rates.
Investors should be positioned for a surge in energy prices in the second quarter. The Middle East energy producers are cutting back oil output. This increases the attractiveness of energy stocks like Devon Energy (DVN), Antero Resources (AR), and Conoco Phillips (COP).
COP stock broke out after shares consolidated at the $110-$115 price range. It closed at $126.84, near its 52-week high.
Cyclical mining firms exposed to a global slowdown will underperform. Be wary of Vale (VALE) and Rio Tinto (RIO).
