Today's US Stock Market 11/14/2023

JP Morgan strategist Marki Kolanovic is telling clients to sell bonds and stocks and move into commodities, specifically oil. " Restrictive monetary policy is likely to remain in place for some time, equity valuations are rich, and consumers are likely to begin to retrench given a fading liquidity buffer, high rates across a range of consumer loan products, tightening lending standards, and rising delinquencies," the strategist commented. "This is likely to drive demand destruction, and weakening pricing power and margins for corporates in the coming quarters, and suggests that consensus expectations that look for 12% EPS growth next year appear overly optimistic."

The Consumer Price Index indicated zero inflation M/M in October, less than the 0.1% increase expected and the 0.4% rise in September. The month's print was mainly due to falling gasoline prices. On a Y/Y basis, the October CPI climbed 3.2%, compared with the +3.3% expected and +3.7% prior. The Treasury Bond ETF #TLT surged 2.31%, while the 10-year Treasury Bond Return (#TNX) fell sharply to 4.453%.

Dow component Home Depot (#HD) has reported a smaller than expected decline in third quarter comparable sales, a shallower fall than Bloomber consensus forecasts for 3.31% decrease, Net earnings fell by 12.2% versus the corresponding period las year to $3.81billion. Company gives a cautious outlook, saying it now sees its fiscal 2023 sales and comaprable sales slipping by 3% to 4% on an annualized basis, narrowing its prior range of 2% to 5%. However, HD is up 6.5.

Major market indexes posted sharp gains today, with the Dow, S&P 500 and Nasdaq up 1.47%, 1.91% and 2.27% respectively. This is one of the biggest increase of the year. The Nasdaq is the biggest gainer, rising 12.3% over the past 2.5 weeks. It has gone up too fast and too fast. I wonder if the seasonal rally at the end of the year has come too early and is almost over? Today's rise is because CPI is lower than expected and people think interest rates are definitely not going to rise. But the market has been playing this theme for quite some time, and it may be running out of steam. Now we might have to worry about what Marki Kolanovic was talking about at the beginning of this article. Another problem is that as a result of this rally, Big Tech's valuations are suddenly too high again. The tech-heavy Nasdaq 100 ETF #QQQ is currently trading at 358.60, very close to the July high of 387.42. It will be difficult to get pass this resistance without resting. It is likely that U.S. stocks are to be sold taking advantage of today's good news near term.