Circle March 15th On Your Calendar

A U.S. government shutdown will likely be averted, but could be chaotic

Highlights

• A U.S. government shutdown will likely be averted, but could be chaotic

• Equity momentum continues to fade as our model flips from green to amber

• Survey data suggests the economy is at “stall speed”…

• … as futures pricing shows an increase in Fed easing odds

Key Takeaways

• Strong Opens, Weak Closes Are a Bearish Sign: A classic sign of a softening market is one that sees repeated strong opens and weak closes — that has been typical these past several days and weeks. After rising nearly +1.4% intraday in yesterday’s action, the Nasdaq Composite finished with a gain of less than +0.3%; the Russell 2000 jumped +1.3% in the early going but that advance faded to a +0.2% uptick by the close.

• Our Model Downgrades Market Momentum: An important development took hold on Tuesday and was confirmed yesterday, which is that our Rosenberg Research Equity Momentum Model has officially moved from green to amber for the first time since July of last year and presaged a brief but sharp -8.5% drawdown in the S&P 500. The model is available on our website under the Proprietary Models page as well as the PDF version of Breakfast with Dave.