The best way to prepare for the trading week

With Q1 in the bag, what's next for 2023? [The Most Powerful Trading Tool of His 34-Year Career]( This Technology Made Him A Fortune... [NOW IT'S AT YOUR FINGERTIPS](   With Q1 in the bag, what's next for 2023? The market closed higher on Friday to round out a winning first quarter of 2023. That’s despite widespread fear - and a market drop - sparked by the collapse of Silicon Valley Bank (and spreading to Deustche Bank, among others), the Fed raising interest rates, and the Kansas City Chiefs winning the Super Bowl. OK, maybe the last one didn’t exactly have an effect on the market…but it seems like forever ago with all the market activity. All major indexes finished the quarter on a positive note - with the S&P 500 Index ETF (SPY), Nasdaq-100 ETF (QQQ), and Russell 2000 ETF (IWM) each adding 1.4%, 1.6%, and 1.8%, respectively, on Friday. The strong end to the week capped a winning first quarter, as seen with year-to-date returns on the chart below.     This performance is despite a major crisis in early March with several banks collapsing and the Federal Reserve riding in to save the day. With the Fed “backstopping banks” - injecting liquidity into the banking system via discount window borrowing and the new Bank Term Funding Program - suddenly there were billions of bank dollars looking for a new home. So far, capital has flowed into money market funds - investment vehicles that buy cash-like securities such as short-term Treasury bills - at a record rate. The average yield on these funds is currently 4.6%, the highest since before the 2008 financial crisis. The other place investors have parked their money is one not typically thought of as a “safe haven”...and that’s technology stocks. This is what’s helped the QQQ surge more than 20% in the first quarter. The chart below illustrates the best and worst performing sectors of the first quarter against SPY.     The SPDR Technology Sector ETF (XLK) has led the way higher, dragging the entire market, specifically QQQ, with it. Returns in individual names in this sector have been staggering, with chipmaker Nvidia (NVDA) leading the way, tacking on 94% year-to-date. Microsoft (MSFT) and Apple (AAPL), which together account for nearly 50% of XLK holdings, have rallied 20% and 31%, respectively, in 2023. These stocks also are the top two largest holdings of SPY and QQQ. The technology sector generally sees a rotation of capital out during times of rising interest rates, as high-growth stocks have to pay more for their debt when rates rise, cutting into the bottom line. Right now the market is pricing in rate cuts as soon as July.     Nothing is set in stone, but so far in the first quarter, investors are betting on tech and a Fed pause in the interest rate hike cycle. Other top sectors of the year include XLC, the communication services ETF, and XLY, or the consumer discretionary sector. XLC has benefited from the overall tech rally, as the ETFs single largest holding is Meta Platforms (FB), which has risen 69% in 2023. Shares of Amazon (AMZN) and Tesla (TSLA) lead XLY’s top holdings, accounting for 40% of the ETF. AMZN and TSLA have added 20% and 91% year-to-date. The sectors lagging in 2023 are Utilities (XLU), Health Care (XLV), and (no surprise) XLF (Financials). But Money Morning LIVE Chief Economist Garrett {NAME} [could see the situation changing for the financial sector very soon](. Yesterday, Garrett had the chance to sit down and discuss the market with special guest Porter Stansberry, founder of Stansberry Research. Mr. Stansberry was gracious enough to share his “battleship stocks”, or companies that are both resistant to economic risk and can provide consistent returns over time. [Click here to watch Garrett and Porter’s discussion.](   AI - Tool of the future or Terminator in waiting? Tech leaders and academics signed an open letter calling for a pause of some of the more sophisticated AI experiments, citing risks they claim could result in “loss of control of our civilization.” Elon Musk, Apple co-founder Steve Wozniak, Pinterest co-founder Evan Sharp and 1,400 others signed the letter, published by the Future of Life Coalition, calling the AI development race “reckless” and with potential unexpected societal consequences, such as the loss and/or obsoletion of human jobs. 😬 Here at Money Morning LIVE, Nick Black has been all in on AI since well before ChatGPT became a household name. [Check out what Nick has to say about AI right here, and see TODAY'S # AI PICK.]( (HINT: It’s not ChatGPT) I, for one, welcome our new AI overlords.   Economic data for the week starting 4-3 (expectations)   Monday - Institute for Supply Management (ISM) Purchasing Managers’ Index (PMI) Tuesday - JOLTS - Job Opening and Labor Turnover Survey (10.49 million) Wednesday - Automatic Data Processing (ADP) Non-Farm Employment Change (208K) Thursday - Unemployment Claims (200K) Friday - Unemployment Rate (3.6%), Non-Farm Employment Change (235K)   Three things to keep your eye on for next week 1. Will the rally continue? The recent rally off financial crash lows has taken place on lower than average trading volumes. Is this rally the real deal, or are Wall Street institutions lurking and waiting to pull the rug? Tune into Money Morning LIVE to stay informed and ahead of the game. 2. Jobs, jobs, jobs. Starting Tuesday with the JOLTS report, traders can expect significant economic data about jobs - and in turn, the economy as a whole - every morning. With the Fed closely monitoring employment levels (along with inflation) to dictate their policy, this is an important week. 3. Earnings expectations. With earnings season just around the corner - big banks kick things off April 14 - per share estimates haven’t moved much in the last two weeks despite rate cut expectations and negative headlines. Earnings have been expected to be low since fed funds rate hikes and quantitative tightening in 2022…which could make for more surprises than normal.   Saturday School Get ahead of the training week by staying prepared… [💸 - Pillars of VWAP]( - download your free guide to all things VWAP [right here]( and start down the path to trading like “The Warlock” Kenny Glick [💸 - Build the Perfect Options Trade]( - Mark Sebastian is an expert when it comes to volatility…[check out this free]( guide in how to turn low volatility into asymmetrical returns. [💸 - Maximizing Returns with Probability of Profit]( - it’s crucial for traders to understand risk vs reward. Momentum expert Garrett {NAME} breaks it all down - and leaves you with some tools for your arsenal - [right here](.   We’d love to hear from you! There’s nothing more that we value than hearing from our loyal Money Morning LIVE audience! 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