MidWeek Commentary

HI Market View Commentary 03-25-2024

HI Market View Commentary 03-25-2024

Apparently GS is about as certain of this year’s market as I am.  This headline reflects it.

Big tech companies could drive the S&P 500 to 6,000 this year or crash it to 4,500, says Goldman Sachs.


In my opinion, money managers put you into a diversified “fund” because they can’t or won’t do the work themselves



The Big Picture

Last Updated: 14-Mar-24 15:29 ET | Archive

Lots of loose ends to deal with

In approximately two weeks, the first quarter of 2024 will come to an end. Per usual, there have been a share of surprises for the stock market — some good, some bad, and some that are indeterminate.

  • AI chip leader NVIDIA (NVDA) has gained as much as 97%. That’s good.
  • EV leader Tesla (TSLA) has dropped as much as 35%. That’s bad.
  • Inflation has come down a bit, but it has a way to go to reach the Fed’s 2% target. That’s indeterminate.

There are a lot of loose ends out there on the geopolitical, economic, monetary policy, fiscal policy, and election fronts. By default, that means there are loose ends out there, too, for the stock market. Nonetheless, the stock market has been running with a sense of ease so far in 2024.

The Dow Jones Industrial Average, S&P 500, and Nasdaq Composite have all set new record highs. Small-cap, mid-cap, and large-cap indices are all higher for the year, albeit in varying degrees. Growth stocks are up, but so are value stocks.

In brief, the stock market has been governed by a bullish bias so far in 2024 amid the surprises and the ongoing loose ends, more of which can be expected in coming months. What that means for the stock market’s performance over the coming months will depend on which way the surprises break and how those loose ends get tied up — or don’t.

No Threat Yet

Arguably, the biggest surprise so far in 2024 has been the shift in the market’s rate cut outlook. Carrying that idea a bit further, the biggest surprise is that the stock market has run to record highs even though the market has adjusted its thinking to expect three rate cuts before the end of the year instead of the six rate cuts expected when 2024 began.

Although there has been a downshift in rate cut expectations, we suspect the stock market hasn’t downshifted because it hasn’t felt a threat to the earnings outlook.

On the whole, economic data has come in with a soft landing/no landing glow to it. Accordingly, analysts have not been given a data-based reason to cut their full-year earnings outlook in any meaningful way. When the year began, the consensus FY24 S&P 500 EPS estimate was $243.32. Today, it sits at $242.79, according to FactSet, which is 11.1% above FY23 earnings versus 11.4% when the year began.

The forward 12-month EPS estimate, meanwhile, has climbed to $249.31 from $243.19 at the end of 2023. The corresponding P/E multiple is 20.7x. That is a 17% premium to the 10-year average.

In other words, there has been multiple expansion with the price of the market-cap weighted S&P 500 rising at a faster rate than the earnings estimate. As of this writing, the market-cap weighted S&P 500 is up 8.0% for the year. It is pricey from a valuation standpoint, which is its own restrictive factor as market participants concern themselves with paying too much for earnings growth that might not be realized.

That is a key reason why it is important for earnings estimates to keep going up, because a market (or an individual stock) trading at a premium valuation is at risk of a stronger dislocation if negative surprises appear that upend the earnings growth outlook.

The valuation constraint for the equal-weighted S&P 500 is a lot less demanding. It trades at 16.8x forward 12-month earnings versus a 10-yr average of 16.4x. The discount to the market-cap weighted S&P 500 underscores the outsized influence of the mega-cap stocks on the market-cap weighted S&P 500.

Bull Market Behavior

Notwithstanding the valuation gap, the stock market has been seeing some welcome rotation into other corners of the market. Granted the communication services (+12.2%) and information technology (+12.0%) sectors have paced year-to-date gains for the market, but the first half of March has seen the energy, materials, utilities, and consumer staples sectors exhibit relative strength. The same goes for the Russell 3000 Value Index versus the Russell 3000 Growth Index.

The rotation has occurred as some of the so-called Magnificent 7 stocks have faltered, namely Apple (AAPL) and Tesla (TSLA). This is actually a good sign. It is the type of behavior one would expect to see in a bull market.

Former leadership stocks breaking down could be construed as an ominous trend for the broader market, but thus far the earnings results and outlooks from other mega-cap stocks have enabled investors to excuse shortcomings elsewhere as an isolated situation. Therefore, it would appear that stocks elsewhere are benefiting at the expense of a rotation away from the likes of Apple and Tesla, although it would be remiss not to add that NVIDIA and the semiconductor stocks have been among those beneficiaries on a momentum trade that has been of great benefit to the market.

In any case, the look and feel of the gains so far in 2024 still has a mega-cap/growth stock edge to it, but it is not devoid of participation from other parts of the market. That, again, can be attributed to the resilient economy, which is fostering some renewed attention on value stocks and/or stocks outside the information technology sector.

Eye on Inflation

Where there is plenty of attention is on the inflation story. It is much improved, but the Federal Reserve is looking for more (as are consumers).

The PCE Price Index, which is the Fed’s preferred inflation gauge, was up 2.4% year-over-year in January versus 2.6% in December. The core-PCE Price Index, which excludes food and energy, and which is what the Fed feels it has some control over with its policy actions, was up 2.8% year-over-year in January versus 2.9% in December.

The Fed’s inflation target is 2.0%, so these readings remain above target, but are headed in the right direction. The Fed has noted as much, but still wants to have more confidence that inflation is moving back to 2.0% on a sustainable basis. Notably, Fed Chair Powell said in his semiannual monetary policy testimony that the Fed doesn’t necessarily need to see better data in coming months, only more of the same data it has seen recently to feel inflation is on track to its 2% target.

The market thinks the Fed will get that, which is another reason stocks have remained in favor on the comforting thought that the Fed will soon start dialing back its restrictive policy. The prevailing expectation is that the first rate cut will come at the June FOMC meeting. The CME FedWatch Tool shows a 59.9% probability of the first cut in June, but that is down from 73.6% only a week ago as some sticky CPI and PPI data for February have tempered things a bit.

Thus far, the market has managed the idea of seeing fewer rate cuts this year reasonably well. A risk in this regard would be even fewer rate cuts or no rate cuts at all if the inflation data heat up and move away from the 2.0% target, possibly even causing the Fed to raise rates again.

Rates Rising

The Treasury market has been a bit more skittish to begin the year than the stock market has been. That’s because (1) it has recalibrated for fewer rate cuts and (2) recent inflation data hasn’t been as encouraging as expected.

The 2-yr note yield, which began the year at 4.25% and is more sensitive to changes in the fed funds rate, has risen to 4.69%. The 10-yr note yield, which began the year at 3.88% and is more sensitive to inflation, has risen to 4.30%. That move has also stymied the improvement that had been seen in mortgage rates, which has continued to pressure the housing market.

Higher interest rates can be a headwind for the stock market, yet the move since the start of the year has been tolerated because the momentum that has powered stocks like NVIDIA, and other assets like bitcoin, has been hard to compete with, relative to much lower returns offered by Treasuries, for investors aiming for, and achieving, much higher rates of return.

It may take risk-free rates closer to 5.00% to cause some real pullback waves in the stock market.

What It All Means

It was a fast start to the year for many of the mega-cap stocks, which in turn made for a fast start for the market-cap weighted S&P 500 and Nasdaq Composite. Naturally, there are now a lot of calls that suggest the market is due for a consolidation period or correction (generally defined as a 10% pullback from a high).

The churning we have been seeing in the market more recently is part of a consolidation process, but a corrective move at the index level has yet to unfold.

Still, the market has come a long way in a short time, so it is unreasonable to think it will keep running at the pace it has been. The valuation for the market-cap weighted S&P 500 is stretched, but for the equal-weighted S&P 500 it is still in relatively attractive form.

There could be great reward chasing after the momentum stocks, but there is an inherently larger degree of risk in doing so at this point if the crowd looks elsewhere, interest rates keep rising, or growth disappoints.

To be sure, no one knows what surprises lurk around the corner, but right in front of investors is an equal-weighted opportunity to stay invested with a lower risk profile as loose ends get tied up.

Patrick J. O’Hare, Briefing.com

(Editor’s Note: The next installment of The Big Picture will be posted the week of April 1)


Earnings dates:


Where will our markets end this week?



DJIA – Bullish

SPX –Bullish

COMP – Bullish


Where Will the SPX end March 2024?

03-25-2024            +2.0%

03-18-2024            -2.0%

03-11-2024            -2.0%

03-04-2024            -2.0%




Tues:            GME,

Wed:            BB, FUL

Thur:           WBA




Econ Reports:

Mon:            New Home Sales,  

Tue              Durable Goods, Durable x-trans, FHFA Housinf Pride Index, Case-Shiller, Consumer Confidence

Wed:            MBA,

Thur:           Initial Claims, Continuing Claims, GDP. GDP Deflator, Pending Home Sales, Michigan Sentiment

Fri:               MARKET CLOSED


How am I looking to trade?

Letting stock runs as the trend is bullish


www.myhurleyinvestment.com = Blogsite

info@hurleyinvestments.com = Email







Billionaire Investor to Back Donald Trump 2024

The investor is Trump’s neighbor in Palm Beach, and had earlier supported him in 2020.

Billionaire activist investor Nelson Peltz plans to vote for former President Donald Trump in the 2024 presidential race, citing President Joe Biden’s mental condition and immigration policies.

“It will probably be Trump and I’m not happy about that,” he told the Financial Times in an interview, adding that Biden’s “mental condition is really scary.” Furthermore, Mr. Peltz expressed his concern regarding the porous U.S. southern border, which has turned into a hot-button issue for both Republicans and Democrats in the election season.

“We can’t go on letting everyone into this country . . . We have an immigration problem—it’s not a Republican or Democrat problem,” said Mr. Peltz. He expressed opposition to stopping immigration altogether but “I want some boundaries put on it so we know at least who we’re bringing in,” he said, according to the outlet.

Illegal immigration has been a thorn in the side of Democrats, with the Biden administration’s policies being criticized for the massive amounts of inflows across the southern border. Former President Donald Trump said at a recent rally that one of the first things he would do once elected would be to end every single “open border policy of the Biden administration.”

“That border was a tiny fraction of what this border is,” President Trump said. “This is the worst border in the history of the world.” Since President Joe Biden took office, there have been an estimated 10 million illegal immigrants who have crossed the border.

Mr. Peltz is the founder of Trian Fund Management, an investment management firm with offices in New York and Florida. According to Forbes, the firm has $8.5 billion in assets under management, with Mr. Peltz currently worth around $1.7 billion.


Judge Opens Possibility of Jury Examining Records in Trump Document Case

The billionaire is among President Trump’s neighbors in Palm Beach but has not spoken to the former president “in quite a while,” reported FT.

Regarding President Biden’s mental acuity, “I don’t know what he knows and I don’t know what he doesn’t know.” said Mr. Peltz. “I don’t know who’s speaking for him and that’s troubling.” It is not clear whether he will donate to President Trump’s campaign.

Mr. Peltz has been involved with activist investments for some time. In 2017, he fought and won a seat on the executive board of consumer goods conglomerate Proctor and Gamble. Currently, his focus is on Disney.

Peltz Versus Disney

Mr. Peltz’s investment firm Trian has been involved in a proxy battle with Disney for instituting the investor along with former Disney executive Jay Rasulo as board members. Trian currently holds approximately $3.5 billion of Disney stock. The media behemoth and the billionaire investor have been engaging shareholders for the requisite votes needed for the seats.

Disney movies have been underperforming at the box office lately. Mr. Peltz says he wants to “restore the magic” in the company and outlined his visions in a detailed 133-page memo released earlier this month.

Published by Trian to convince shareholders at the company’s annual meeting next month, the memo said that “Disney is the most advantaged consumer entertainment company in the world,” the company “lost its way” with a deterioration in financial performance, and ultimately loss amounting to tens of billions in shareholder value.

“We believe the root cause of Disney’s underperformance is poor oversight from a Board that lacks focus, alignment and accountability.”

The memo detailed how Disney competitors like Netflix and Amazon were faring much better with their content, and return on invested capital and margins.

Trian blamed Disney for showing “no interest in meeting or inviting Nelson Peltz to interview with the Board or Governance and Nominating Committee.”

Disney responded in a 66-page regulatory filing that Mr. Peltz and Mr. Rasulo were “not what Disney needs right now.” The company said their suggestions “are nothing new” and they did not understand the company’s challenges nor had the skills to promote Disney in its current situation.

However, Mr. Peltz has been known to be persistent in achieving his objectives, as was revealed in 2006 with Heinz, in 2015 with Dupont, and in 2017 with P&G.

Biden’s Mental Criticisms

President Biden’s mental capabilities have been increasingly in the spotlight during the election season. His common gaffes and slurring of speech have raised concerns about his age even among those who supported him in 2020.

According to a New York Times/Siena College poll, 61 percent of respondents believed President Biden was “just too old” to be an effective commander-in-chief.

A February special counsel report described the 81-year-old president’s memory as “hazy,” “fuzzy,” “faulty,” “poor” and having “significant limitations.”

The Robert Hur report noted that President Biden could not recall defining milestones in his own life such as when his son Beau died or when he served as vice president.

In response to reporters’ questions about his memory, President Biden disputed the report’s statements and said he’s “the most qualified person in this country to be president.”

The White House also pushed back on the characterizations of President Biden’s memory in a Feb. 5 letter from the president’s lawyers that was published in Hur’s report. The letter argues that the president’s “inability to recall dates or details of events that happened years ago is neither surprising nor unusual,” particularly about when certain documents were packed or moved.

“We do not believe that the report’s treatment of President Biden’s memory is accurate or appropriate,” the letter said. “The report uses highly prejudicial language to describe a commonplace occurrence among witnesses: a lack of recall of years-old events. Such comments have no place in a Department of Justice report.”

“If you’re too senile to stand trial, then you’re too senile to be president. Joe Biden is unfit to lead this nation,” said Alex Pfeiffer, a spokesman for Make America Great Again Inc., the main super PAC backing Trump’s candidacy.

The Associated Press contributed to the report.



Boeing CEO to step down in broad management shake-up as 737 Max crisis weighs on aerospace giant




Meghan Reeder


  • Boeing CEO Dave Calhoun will step down at the end of 2024 in part of a broad management shakeup.
  • Chairman of the board Larry Kellner won’t stand for reelection this year, and Stan Deal, CEO of the commercial airplane unit, is out, effective immediately.
  • Boeing executives have faced increasing scrutiny from regulators and customers over quality control problems.


CEO Dave Calhoun will step down at the end of 2024 in part of a broad management shake-up for the embattled aerospace giant.

Larry Kellner, chairman of the board, will not stand for reelection at Boeing’s annual meeting in May, Boeing said Monday. He will be succeeded as chair by Steve Mollenkopf, who has been a Boeing director since 2020 and is a former CEO of Qualcomm. Mollenkopf will lead the board in picking a new CEO, Boeing said.

And Stan Deal, president and chief executive of Boeing’s commercial airplanes unit, is leaving the company effective immediately. Moving into his job is Stephanie Pope, who recently became Boeing’s chief operating officer after previously running Boeing Global Services.

The departures come as airlines and regulators have been increasing calls for major changes at the company after a host of quality and manufacturing flaws on Boeing planes. Scrutiny intensified after a Jan. 5 accident, when a door plug blew out of a nearly new Boeing 737 Max 9 minutes into an Alaska Airlines flight.

“As you all know, the Alaska Airlines Flight 1282 accident was a watershed moment for Boeing,” Calhoun wrote to employees on Monday. “We must continue to respond to this accident with humility and complete transparency. We also must inculcate a total commitment to safety and quality at every level of our company.

“The eyes of the world are on us, and I know we will come through this moment a better company, building on all the learnings we accumulated as we worked together to rebuild Boeing over the last number of years,” he wrote.

Calhoun told CNBC in an interview Monday that the decision to resign was “100%” his own.

“We have another mountain to climb,” Calhoun said. “Let’s not avoid the call for action. Let’s not avoid the changes that we have to make in our factory. Let’s not avoid the need to slow down a bit and let the supply chain catch up.”

Calhoun, a more than decade-long board member at Boeing, took the top job there in January 2020 after the company ousted its previous chief executive, Dennis Muilenburg, for his handling of the aftermath of two deadly 737 Max crashes.

For months Calhoun has promised investors, airline customers and the general public that Boeing will get its myriad quality struggles under control. The Federal Aviation Administration has stepped up oversight of Boeing, and agency Administrator Mike Whitaker after the Alaska Airlines accident said Boeing will be barred from increasing 737 production until the FAA is satisfied with the company’s quality control.

Boeing’s production problems have delayed deliveries of new planes to customers and hampered growth plans. CEOs of some of the company’s largest customers, including United AirlinesSouthwest Airlines and American Airlines have publicly complained about the delays.

Ryanair, Boeing’s largest airline customer in Europe, said in a statement Monday it welcomes the management changes.

“Stan Deal has done a great sales job for Boeing for many years, but he’s not the person to turn around the operation in Seattle, and that’s where most of the problems have been in recent years,” Ryanair CEO Michael O’Leary said in a video posted to social media platform X.

United’s CEO, Scott Kirby, earlier this month said he urged Boeing to stop making yet-to-be-certified Max 10 planes for the company because it wasn’t clear when the FAA would clear those aircraft to fly.

Last week, airline CEOs started scheduling meetings with Boeing directors to voice their displeasure at the lack of manufacturing quality controls and lower-than-expected production of 737 Max planes. The meetings were to include Kellner and one or more other board members.

Also last week, Boeing Chief Financial Officer Brian West said at an industry conference that Boeing would burn more cash than expected because of limited 737 Max production.

Boeing’s stock added 1.4% on Monday after the announcements. Its shares are down more than 26% so far this year.





Boeing CEO Dave Calhoun to resign at the end of 2024 amid broad leadership shake-up

CNBC’s Phil LeBeau joins ‘Squawk Box’ to report on the latest news from Boeing.



DeSantis signs bills that he says will keep immigrants living in the US illegally from Florida


MARCH 15, 2024

TALLAHASSEE, Fla. (AP) — Florida Gov. Ron DeSantis signed bills Friday that increase the prison and jail sentences for immigrants who are living in the United States illegally if they are convicted of driving without a license or committing felonies.

DeSantis is a frequent critic of the Biden administration over its handling of the Mexican border, sending Florida law enforcement agents and National Guard members to Texas. The Republican governor, who ended his attempt for his party’s presidential nomination last month, has also flown immigrants who entered Texas illegally to Massachusetts and California.

“We do not tolerate illegal immigration, let alone lawlessness committed by illegal aliens who shouldn’t be here in the first place. The bills I signed (Friday) further enhance Florida’s capabilities to uphold the law,” DeSantis said.

The governor tied the driver’s license bill signed Friday to a Florida law that already bars immigrants in the country illegally from obtaining one. It increases the maximum sentence for anyone convicted of driving without a license twice or more from 60 days in jail to a year — this also applies to U.S. citizens and immigrants in the country legally.

Some immigrant support groups have criticized the bill, saying it endangers the public’s safety as many immigrants barred from getting a license will still drive — they just won’t have been tested or buy insurance. Nineteen states and Washington, D.C., issue driver’s licenses to immigrants who are in the country illegally, according to the National Conference of State Legislatures.

“True safety is achieved through comprehensive measures such as driver education, issuing driver’s licenses to all qualified drivers, and access to insurance — not through punitive enforcement,” Renata Bozzetto of the Florida Immigrant Coalition said in a recent statement. “Rather than criminalizing individuals, the Republican legislature in Florida should work to invest in initiatives that promote driver safety, address disparities in the licensing process, and ensure equitable access to transportation for all residents.”

Another bill increases the maximum prison sentences for immigrants who are convicted of felonies after having been previously deported from the country for illegal entry.

For example, such immigrants convicted of low-level felonies like simple burglary or car theft would face a maximum sentence of 15 years instead of the five-year sentence that is the crime’s normal maximum. Such immigrants convicted of mid-level felonies like aggravated battery would face a maximum sentence of 30 years instead of the 15-year sentence that is those crimes’ normal maximum. And higher-level felonies like armed robbery could now carry a life sentence for such immigrants instead of the normal maximum sentence of 30 years.

The American Civil Liberties Union of Florida and the Florida Immigrant Coalition did not respond to requests for comment on this bill.

Copyright 2024 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.



A key inflation reading is due out Tuesday morning. Here’s what to expect




  • The Labor Department’s Bureau of Labor Statistics releases its latest reading on the consumer price index on Tuesday at 8:30 a.m. ET.
  • Excluding food and energy, the increase for core inflation is forecast at a 0.3% gain, also one-tenth of a percentage point above the previous month.
  • Inflation’s resilience almost certainly will assure no Fed rate cuts at its meeting on April 30 to May 1, and possibly into the summer.

Rising gasoline prices likely put a floor under inflation in February, potentially reinforcing the Federal Reserve’s decision to take a go-slow approach with interest rate reductions.

Economists expect that prices across a broad spectrum of goods and services rose 0.4% on the month, just ahead of the January pace for 0.3%, according to the Dow Jones consensus. Excluding food and energy, the increase for core inflation is forecast at a 0.3% gain, also one-tenth of a percentage point above the previous month.

On a year-over-year basis, headline inflation is expected to show a 3.1% gain and core inflation a 3.7% increase when the Labor Department’s Bureau of Labor Statistics releases its latest reading on the consumer price index Tuesday at 8:30 a.m. ET. The respective 12-month readings in January were 3.1% and 3.9%.

Though it has fallen sharply since its peak in mid-2022, inflation’s resilience almost certainly will assure no Fed rate cuts at its next meeting March 19-20, and possibly into the summer, according to current market pricing. Markets were rattled in January when the CPI data came in higher than expected, and Fed officials shifted their rhetoric afterward to a more cautious tone about easing policy.

“While we do not expect the trend in inflation to re-accelerate this year, less clear progress over the next few months is likely to keep the Fed searching for more confidence that inflation is on course to return to target on a sustained basis,” Sarah House, senior economist at Wells Fargo, said in a recent client note.

Energy prices had eased earlier in the winter, putting some downward pressure on headline readings.

But Wells Fargo estimates that energy services rebounded 4% in February, leading to an increase at the pump, where a gallon of regular gas is up about 20 cents, or more than 6%, from a month ago, according to AAA.

The bank also estimates that goods prices have held their ground despite an easing in supply chain pressures and pressure from higher interest rates. On the brighter side, the House said lower prices on travel, medical care and other services helped keep inflation in check.

Still, Wells Fargo has raised its full-year inflation forecast.

The bank’s economists now expect core CPI to run at a 3.3% rate this year, up from the previous 2.8% estimate. Focusing on the core personal consumption expenditures price index, the preferred Fed gauge, Wells Fargo sees inflation at 2.5% for the year, versus a prior estimate of 2.2%.Wells Fargo isn’t alone in expecting a higher pace of inflation.

In its February survey of consumers, the New York Fed found that while respondents held to their one-year outlook for inflation at 3%, their expectations at the three- and five-year horizons accelerated to 2.7% and 2.9% respectively, both well ahead of the central bank’s 2% target.

While increases in gas prices can play an outsize role in monthly fluctuations for the survey, the outlook for gas price increases was actually relatively benign.

An Atlanta Fed measure of “sticky price” inflation held at 4.6% on a 12-month basis in January. The gauge is weighted toward items such as housing and insurance, and Fed officials are hoping that shelter costs decrease through the year, taking some pressure off the cost of living gauges.

On Thursday, the BLS will release the February producer price index, which measures what producers get for their goods and services at the wholesale level. The two indexes will be the last inflation data the rate-setting Federal Open Market Committee will see before it meets next week.


Apple reportedly in talks with Baidu on AI for devices

CNBC’s Steve Kovach joins the ‘Fast Money’ traders to talk the Wall Street Journal’s report that Apple is in talks with Baidu concerning AI for its devices.

FRI, MAR 22 20246:08 PM EDT


Related posts

HI Financial Services Mid-Week 06-24-2014


HI Financial Services Mid-Week 06-02-2014


HI Financial Services Mid-Week 05-20-2014


HI Financial Services Mid-Week 05-13-2014


HI Financial Services Mid-Week 05-13-2014


HI Financial Services Mid-Week 05-07-2014


Leave a Comment

2 × five =