Market Insights

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Sizing Up the S&P 500

• S&P 500 holds tight range 1.6% from record high
• Friday’s last price was the index’s highest weekly close ever
• Holds 21-day EMA, forming inside week
• Breadth weaker as megacaps keep leadership
• VIX peaks at 15 (old support in 2021)
• S&P 500 may resemble April-May 2023 period before debt ceiling was raised. (This time, the 1/31 Fed meeting is a potential catalyst.)
• Treasury yields may be near top of recent ranges
  • 10-year (TNX) potentially topping at lows of 12/6 and 12/7

Key News

• Retail sales beat estimates for 6th straight month
• NAHB homebuilder sentiment beats estimates on sales optimism
• Christopher Waller and WSJ’s Timiraos cite QT reduction.
  • Waller sees rent inflation coming down amid data lag
• Dec PPI lower than expected, Nov revised lower
• Jan Empire Index misses estimates amid weak orders and shipments
• UBS raises S&P 500 yearend target to 5150 from 4850, citing rate cuts and lower inflation
• Bill Ackman on CNBC: Fed needs to move early, cut more than 3x in 2024 with “inflation cooling very meaningfully.”
• More oil: Norway grants 62 exploration permits, up from 47 a year ago

China Slowdown in Focus

• Q4 GDP +5.2%, missing +5.3% estimate
• Retail sales +7.4%, missing +8% estimate
• New home prices -0.4%, worst decline since February 2015
• Population falls 2.08mln, second straight annual decline
• China Beige Book: “The recovery from COVID — disappointing as it was — is over.”
• Moody’s Analytics: Stimulus needed

Microsoft vs Apple

• MSFT’s market cap surpasses AAPL thanks to enterprise-level AI focus.
• MSFT outperformed AAPL in 1990s, then lagged after iPods and iPhones
• Is a 15-20 year era of AAPL outperformance ending?

Sector Watch

• Healthcare is top-performing sector so far in 2024
• Growth stocks mostly outperforming
• Energy and Materials lead to downside amid strong economic data, Chinese weakness
• Small caps lag, but Russell 2000 revisits mid-December breakout zone
• Solar energy, electric vehicles lagging this year
• Chinese stocks revisit 2022 lows
• Weakness in precious metals could be a positive for stocks

Mover of the Week: Cameco

• Canadian uranium producer rallies as nuclear-fuel prices increase
• Kazakhstan’s Kazatomprom (world’s top uranium producer) warns of potential output cut
• Global uranium supplies already squeezed by Niger unrest
• CCJ +87% in past 12 months

Upcoming Events

• Fri 1/19: Consumer sentiment, existing home sales
• Tue 1/23:
  • Earnings include NFLX, JNJ, HAL, TXN, PG
• Wed 1/24:
  • Earnings include TSLA, NOW, IBM
• Thu 1/25: GDP
  • Earnings include INTC, V, AAL

About 13% of the S&P 500 report earnings next week. Reminder: “Next Earnings Date Studies – Next Earnings Date RS” can turn RadarScreen into an earnings calendar. See “Earnings dates” tab on “MT Main Jan 2024” workspace for more.

Using the Platform

• Keltner Pullback shows location within Keltner Channel, which creates price bands using Average True Range (ATR).
  • 0% = price at bottom of Keltner Channel
  • 100% = price at top of Keltner Channel
  • Lower values suggest potential pullbacks
• Custom indicator for RadarScreen and Scanner (see zip file above). It was added to the “price grid” tab in newest version of the Market Trends workspace.
• Keltner Pullback can be used with moving averages to find upward-trending stocks that have pulled back, or downward-trending stocks that are overbought.

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