Don’t look back because the market is closed. Good Monday afternoon, everyone. Tyler Herridge here with you for today’s Vray investing podcast. We hope you all had a great weekend out there and a good start to your week as well. It was a good start to our week for our major indexes here as we got a number of 52 week highs, all time highs for our major indexes and seeing it in our individual names as well here, as well as our major sectors. Our VRA leading economic indicators hitting 52 week highs or all time highs today. So a strong start to the week that really came out of the gate strong this morning. We saw a little bit of sideways action after that throughout the day.
We weren’t able to get back to those highs of the day this morning, but the main theme here continues to be new highs beget new highs. That’s been working pretty well since the lows from October of 2022, and that has been our view since that time as well. And our view remains unchanged going forward. That buy the dip continues to be the smart money move in 2024. So I’ll get into all of that here today, but it will be an eventful week as well. So let’s take a look at what we have to look forward to this week, namely earnings. As we start to kick into gear here for earnings, we did get Taiwan semis strong earnings last week, and this week tech continues to roll on. Tomorrow we’ll get Netflix, then on Wednesday we’ll get Tesla as well.
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And on Thursday intel. So not quite kicking into high gear here for earnings, but certainly some exciting names coming up this week. We’ll also be getting a few economic reports this week as we head in to the first FOMC meeting of 2024, which will be next week. No expected change in rates for next week. The big view here is the next big move here from the Fed is expected in March. I’ll touch on that some today here as well. But let’s start off with the high notes. Our markets on the day, all of our major indexes finishing higher here on the day today, and small caps leading the way.
Our only major index to finish near its highs of the day today was able to get back to those high levels towards the end of the day, up a big 2% on the day to 1983. Now, I want to focus on small caps here for a second, as this has been a group that we’ve liked a lot here at the VRA. So recently, after small caps had a strong end to 2023, we have fallen here 4.1% to start the new year, obviously lagging behind our other major indexes, which are higher on the year s p up on the year, getting back to all time highs as well. We’ve got the dow at all time highs, but we’ve got small caps underperforming, especially relative to those other indexes here. But what’s interesting about this underperformance is that small caps are still clinging to a lead over large caps since the October lows of 2023. That is another low that we’ve talked about here a lot. There was a great buy the dip opportunity as well. But since that time, the Russell 2000 has outperformed the S and P 500.
So it’s not just about what has happened to start off the year here. Plus, what really matters is that a bad start to the year for small caps doesn’t necessarily mean declines for the rest of the year. Take this example here. When the Russell 2000 started the year with a decline of at least 4%, its median performance for the remainder of the year was a gain of 26.1%. That’s six out of seven times there. So if you exclude 2008, it’s higher 100% of the time on the year going back to 1979. That thanks to bespoke for that piece there. We expect it to be that kind of a year for small caps.
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If you want to know some of our favorite small cap picks, come and check us out. We’ve got a two free week trial going on right now@vraletter.com. Next up here on the day, the Dow Jones closing at an all time high today. First close ever. Below or above? Excuse me, 38,000 for the Dow Jones, which was up just over three tenths of 1% today, just barely getting above 38,000 for the close at 38,001. Next up here was the Nasdaq, up just over three tenths of 1% as well to 15,360. That is a 52 week high for the Nasdaq. Let me get a quick look at one more chart here.
But that’s exactly what you want to see is tech maybe not leading the way with small caps taking that mantle today, but you want to see tech higher and semis leading tech. And that’s what we got today. SmH, the semiconductor ETF, up over four tenths of 1%, making an all time high today. Very good to see. We’d love to see the semis making all time highs, as we say. Repeat it here again. New highs beget new highs. Then finally for today, the S and P 500 was our laggard on the day.
From our major indexes up just over two tenths of 1% to 4850. But that is another all time closing high here from the S and P 500. We are now hitting short term overbought levels there, but there is still room to run in the short term here. But over the medium and long term really is where we remain the most bullish. As Ed Yardini pointed out in his latest piece, the forward PE right now for SP 500 tech sector is currently at a 26.2. Well, during the.com meltup, which we’ve talked so much here about, that, we see that we’re now in a period like that from 1995 to 2000 where tech names just absolutely soared. Well then the PE ratio rose to nearly a 50. So we’ve got basically double to go on valuations before we get to that level of irrational exuberance that we saw at the end of the.com melt up.
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So as we see it here again just in the early innings, and we’ve said this here often as well, when you’re hitting new all time highs, that is the beginning of a new bull market in our view as well. That’s when the fun really begins. So we remain long and strong here for roaring two thousand and twenty s. And it’s not just us major indexes hitting new highs either. Today we got Japan. Their major index, the Nike just closed at its highest level in 34 years. So good to see the type of expansion broadening out as well. We saw it in our internals from individual names.
Breadth is increasing whether it’s in the small caps. One more factor that I forgot to bring about here is that we’ve been seeing under the surface for the Russell 2000, new highs, new three month highs in stocks and more 52 week highs in stocks as well. That’s a trend we want to see continue. We like this breadth expansion next year up here. Let’s take a quick look at the bond market here today as yields were down just about across the board. The ten year down one and a quarter percent, still above a four at a 4.9. We’ve said for a long time that we expect yields to continue heading lower. Now we would like to see it in a slow and controlled fashion.
Not the Fed cutting rates six times this year. We’re not in that camp. We’re fine with the Fed cutting know two, three, maybe even four times if it seems warranted. But we’ve said this here for some time. When the Fed starts cutting rates, it’s typically not a good sign for the economy. Now, we will need to lower them just a little bit, but we again want it to be in a controlled fashion, not in a reaction to something that is broken or gone wrong. That’s the camp that we’re in. We’ve been in that camp for some time, even though we’re heavy critics of the Fed when they were raising rates.
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Now that we’re here, we’re already here, right? So now that we are here, we got to look at the best path moving forward. But again, so we wouldn’t want that because it means that the US economy would be in bad shape if they’re having to cut rates. We want them for longer because it means higher, for longer because it means that we’re in good shape here. And it’s good to see. We’re starting to see that in sentiment showing up as well as the CME Fed watch tool. The ods of a March rate cut just dropped dramatically. And it’s no longer the majority view. Just one week ago, roughly 77% of consensus was for a rate cut in March, and just a 19% chance that they remained at current levels.
Now that idea just absolutely collapsed. No longer the majority view fell over 30% from last week. Now just a 40% chance of a cut in March to a 58% chance of a continued pause. Now we’ve got one Fed meeting between now and then. We’ve got a lot of inflation data coming back, which we expect to be good. And that will give the Fed some cover if they do want to start cutting rates. One view here that I do think is interesting is that the Fed would want to cut rates as far in advance as possible of a presidential election. That’s one factor to look at here so that they don’t look as biased, even though we know they are.
If you look at the voting patterns of Fed board governors, it’s like 80% of them are democrats. So not really getting a fair shake here as far as the bias is concerned from where they’re going. But they still don’t want to appear political, so they would likely try to cut rates sooner rather than later. Although we see it as nothing as bullish for the stock markets, I should say, as we do expect it to be kind of a controlled cut, not six rate cuts like many have been looking for. And one more note here on treasuries today that we learned today is from bar chart. The ten year treasury now has the largest short position in history. That’s for bond prices, not yields. Right? That is typically when you start to see a bottom starting to form.
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Just like people start calling for a top when everyone and their mom is bullish out there. Well, everyone is seemingly bearish on bond prices from here. As contrarians, we like to take the other side of that bet here. We do see bond prices heading higher. Next up here, let’s take a look at our internals on the day to day where we got exactly the numbers you would want to see. And a much needed improvement over recent readings showing here again, breadth expansion as we had more advancing stocks than declining. Coming in over three to one positive on the NYSE. Just shy of three to one positive on the Nasdaq.
52 week highs, lows coming in nicely. Positive as well. Over five to one positive on the NYSE and almost two to one positive on the Nasdaq. And lastly here, volume, not exactly a huge day here, but we did get beats. A huge day would be the 80% to 90% upside volume kind of day. We didn’t get that, but we were positive on the NYSE and over two to one positive, roughly two and a half to one positive on the Nasdaq. So good numbers overall from our internals on the day. Next up here, taking a look at our sectors, we finished with eight out of our eleven sp 500 sectors higher on the day today.
We were led by the industrials today, which is also, I’ll point out, nearing a 52 week high here today. And I didn’t bring this up with the Dow earlier, I should have, but the transports up a big 2.2% on the day today. That is a trend we want to see continue as well. Next up for our sectors, real estate, which if you’re a longtime listener here, you know, during real estate, this is when we like to bring up the real story, which is housing, because in the real estate sector, it’s mostly made up of reits. So it didn’t really give you the story. The real story is in housing, which hit an all time high today, both for HGX and for our home builders as well. That’s exactly what we want to see after that. The financials also hitting a 52 week high today, followed there by the tech sector.
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Xlk hitting a 52 week high today. So lot of new highs out there. Exactly what you want to see. Then our laggards. On the day today, we were led lower by consumer discretionary, followed there by utilities and consumer staples. So for consumer staples and utilities, defensive sectors here about what you would expect. Finally here for today, our VRA commodity watch, a little bit of red on the screen. Gold now down three tenths of 1% to $2,023 an ounce.
Silver down more 2.23% to $22.20 an ounce. Copper down just over 1% to $3.74 a pound, and oil catching a little bit of a bid here, up almost 2% on the day to $74.54 a barrel. Finally here for today. Bitcoin now breaking below 40,000 for the first time since early December. Today, as it’s looking more and more like the ETF news was a buy the rumor, sell the news kind of event. This is a group that we do remain very bullish on here going forward, and another group that we would say buy the dip in as well. Folks, that is all that we have time for here today. Please be sure to subscribe to receive our VRa podcasts every day at the market close.
You can sign up at Vra, a letter, click the podcast link at the top, and we’d love to have you with us. Thanks again for tuning in. Until next time, we’ll see you back here tomorrow for the close. Bye.