The Market’s Bullish Armor Begins to Show Cracks

by | Apr 21, 2024 | Invest During Inflation | 10 comments

The Market’s Bullish Armor Begins to Show Cracks




Tax Day woes and audit fears; earnings season commences; What are companies saying? No corporate buybacks, removing major buyers of assets; pay attention to companies’ guidance. Markets last week failed at 20-DMA, and tested 50-DMA as momentum slowed. Is not the time to sell? Use any bounce to rebalance risk, but avoid any knee-jerk reactions. Could this be a “buy-the-dip moment?” Lance’s favorite bowl is like the market: There’s a hairline crack. Inflation has been stickier, and higher-for-longer interest rates have been too high for too long. Preview: Tuesday’s article on the Reflation Trade; how can every other country in the world have deflation while the U.S. continues to have inflation? Productive debt sv non-productive debt. Get ready for Tax Season impact on the market; more Americans are owing money this year. More IRS Agents = More audits = more returns/refunds delayed. The possibility of escalation in the Middle East; Legos for Adults (AFOL)

3:13 – Tax Day Woes & Earnings Season Starts
14:45 – Could This Be a Buy-the-Dip Moment?
30:22 – Cracks in the Market
44:32 – Tax Day Woes, Middle East Foes, & Adult Legos

Hosted by RIA Advisors Chief Investment Strategist Lance Roberts, CIO
Produced by Brent Clanton, Executive Producer
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Articles mentioned in this report:
“Cracks Appear In The Market’s Bullish Armor”

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The stock market has been on a remarkable bull run in recent months, with many major indices hitting all-time highs one after another. However, on April 15, 2024, cracks began to appear in the market’s bullish armor, sending shockwaves throughout the financial world.

The S&P 500, Nasdaq, and Dow Jones all experienced sharp declines on that fateful day, causing many investors to panic and wonder if the long-standing bull market was coming to an end. The catalyst for this sudden downturn was a combination of factors, including rising inflation, geopolitical tensions, and concerns about the Federal Reserve’s monetary policy.

Inflation has been a growing concern for many economists and investors, as prices for goods and services have been steadily increasing. This has led to fears that the Federal Reserve may need to raise interest rates to combat inflation, which could slow down economic growth and stock market gains.

Geopolitical tensions also played a role in the market’s decline, particularly in regions like Eastern Europe and the Middle East. Conflict and instability in these areas can disrupt global trade and supply chains, leading to uncertainty and risk for investors.

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Additionally, investors were on edge about the Federal Reserve’s monetary policy decisions. The central bank has been signaling that it may begin tapering its asset purchase program, which has been supporting the financial markets for years. This could lead to higher interest rates and decreased liquidity in the market, potentially dampening investor sentiment.

As a result of these factors, the stock market experienced a significant pullback on April 15, with many high-flying tech stocks taking the brunt of the losses. Investors raced to sell off their positions, leading to a sea of red in the trading screens.

While the market’s pullback on April 15 may have been a wake-up call for many investors, it’s important to remember that market corrections are a normal part of investing. It’s impossible to predict the exact timing or magnitude of market downturns, but having a diversified portfolio and a long-term investment strategy can help weather the storm.

As the market recovers from the cracks that appeared on April 15, investors should remain vigilant and stay informed about economic indicators and geopolitical events that could impact their investments. The road ahead may be bumpy, but with careful planning and patience, investors can navigate through the uncertainty and come out on top in the long run.

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10 Comments

  1. @thach0x0

    The current momentum in the job markets is sustainable?The best question Lance Roberts has brought out here .Agreed .The U.S. treasuries nose dived as seen last October .
    Again another good entry soon .
    The equity likely to consolidate further but it will be an opportunity rather than going to a long term bear market .

  2. @Erikpdx

    Narrator: the market didnt continue rallying

  3. @backslapped2851

    This entire notion that immigration is having a material effect on the economy in the short-term reminds me of the fairytale that student loan payments restarting was going to cause a recession. Building stories around these ideas just doesn't seem productive…

  4. @jmcmob608

    Thank you very much…

  5. @duncancurry4

    Seems like you assume immigrants (illegal or otherwise) cause net consumption/increased demand rather than net production (which has always been the case). I think economy is doing better because most illegals are working and don’t get social benefits/welfare, which is a good thing. We need more labor and more work visas for immigrants, not less imho. Immigrants are what make the US great.

  6. @karlbork6039

    Lance is constantly backtracking.

  7. @mikepodorski4272

    My son loves Legos. We went to a local Lego resell shop yesterday and I was blown away. Tons of adults trading and buying. Quite interesting.

  8. @tnt_pkk1311

    Expect cooler head in Israel is like expecting Biden knows what’s he doing

  9. @gabrielw7773

    Didn't have a screaming 10 year bond yield in 2021 either Lance.

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