SPY - QQQ: Macro Trends Favor Non-Tech Areas Bullish Seasonal Trends

2024-05-12 06:42:43 ET

Summary

• S&P 500 Q1 earnings growth is close to 10% thanks to mega-cap tech companies, but NVIDIA is yet to report.
• Weaker-than-expected US data could lead to a Fed rate cut, benefiting sectors away from tech-focused sectors that dominate the Nasdaq 100 ETF.
• QQQ's sector valuation is high, and sector rotation suggests it may not be best positioned for relative gains.
• I concede that QQQ's seasonality is bullish today, and I highlight key price levels on the chart to monitor in the months ahead.

There's no doubt that mega-cap tech helped lift earnings growth for the S&P 500 during the Q1 reporting season. FactSet notes that ex Bristol-Myers (BMY), Gilead (GILD), and Pfizer (PFE), which reported unusual operating EPS numbers, SPX year-on-year earnings growth is tracking close to 10%. It is clear that the profitability story remains intact if you are a tech bull. Let's go through a series of macro charts affecting equities in the Nasdaq 100 ETF (QQQ), Invesco QQQ Trust ETF....

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