These three charts explain what is happening in the stock market right now
Yahoo Finance has launched its first Chartbook, consisting of fifty charts from top financial experts. Three of those experts, Interactive Brokers Chief Strategist Steve Sosnick, Wall Street Horizon VP of Research Christine Short, and Freedom Capital Markets Chief Global Strategist Jay Woods, joined Yahoo Finance Live to explain what their charts show. Sosnick's chart illustrates the Federal Reserve's balance sheet compared to the S&P 500 (^GSPC). One of the most common phrases one will hear on Wall Street is "don't fight the Fed." Sosnick warns that "we fought the Fed a little bit of late 2021. We succumbed to the Fed in 2022. And we were helped out by the Fed in the March-April period after the banking crisis was resolved. The problem now is, I think we are back to fighting the Fed, and that becomes a trickier situation right now." Short's chart is a proprietary metric that tracks how many companies report their quarterly results later than they usually do. Short says that research shows if a company reports significantly later than usual, it "tends to be that there is bad news that follows," with the opposite being true if the company reports far earlier. Short's team aggregates the data to get a bigger picture look at what these delays may reveal. Short notes that the index has been ticking higher, indicating more companies are reporting later. Short says it it doesn't work 100% of the time, but about "two-thirds of the time, we find it really does go directionally one way or the other," using UPS (UPS) as an example. Short says the company reported its quarterly results later than usual, and as it turns out, the company reported a revenue miss. Woods' chart shows the performance of the Dow Jones Industrial Average (^DJI) compared to the Dow Jones Transportation Average (^DJT). This shows "old school technical analysis 101 Dow theory," Woods says. As Woods explains, "it basically says one thing when the Dow Jones Industrials, the things that make, and the Dow Jones Transports, the things that take are doing well... this is a bullish development." With both indexes climbing, "it proves, time and time again, we are in a bull market," Woods said. Key video moments 00:00:44 Sosnick's chart 00:03:05 Short's chart 00:07:00 Woods' chart
