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Major stock averages rose across the board during the holiday-shortened trading week, with the S&P 500 index closing at a new all-time high on Friday, breaking its last record set in January 2022.
But the biggest winner this week was the tech-heavy Nasdaq, which rose more than 2%. Magnificent Seven (Amazon, alphabet, apple, meta platform, microsoft, Nvidia, tesla), led by Nvidia, which rose 8.74% for the week, and Apple, which rose 3.03% after a major rating upgrade by Bank of America.
After two consecutive weeks of wins, all three averages are in the black in 2024.
Within the portfolio, we heard voices such as: morgan stanleyDespite the better-than-expected results, the company came under pressure as management took a cautious approach. Although the bank’s wealth management business has outperformed consensus expectations for sellers, it hasn’t quite matched buyer expectations.
On the macroeconomic front, retail sales beat expectations on Wednesday, forcing investors to reconsider their estimates of how many interest rate cuts the Federal Reserve will make this year, putting pressure on stock prices. I applied it.
We’re in a strange moment in terms of data. On the other hand, I don’t want to see numbers so strong that there is no need to cut interest rates. On the other hand, strong data speaks to the resilience of the economy, which provides a good backdrop for business operations. As a result, investors are looking for data that is strong enough to support sales and profit growth while keeping unemployment low (data that is good for business fundamentals). But we also need data that shows continued disinflation to allow the Fed to cut rates (which is good for stock valuations). Fortunately, there will be some useful information in the coming weeks as earnings season gets into full swing and the latest inflation data is released.
Housing inflation is proving more difficult to resolve. This week, we learned that single-family housing starts fell 8.6% in December from the previous month, even though housing starts and building permits were stronger than expected. This is not great. We would really like to see more supply come to market to help alleviate some of the shelter costs. Existing home sales were lower than expected, falling 1% month-on-month and 6.2% year-on-year, the lowest level since 1995. The combination of a lack of supply and high interest rates is forcing many people to simply stay home. Again, this is not ideal as it will push home prices higher. Great if you own one, but not so great if you’re looking to buy.
It’s also not good for the Fed, which is trying to beat inflation, since shelter costs are a major driver of price increases.
As we look to next week, we’re set to see some important economic updates and earnings announcements ramp up.We will ask for your opinion in the portfolio. procter and gamble before the opening bell on Tuesday.
1. Personal Expenses. The biggest macroeconomic item to watch is the personal spending and income report for December, which will be released on Friday. The report includes the important Core PCE Price Index, the Fed’s preferred inflation measure, while markets are still trading primarily on interest rate expectations and there is much debate over future rate cuts. It is important because there are As of Friday, expectations (according to FactSet) were for a 2.9% annualized rise, a significant slowdown from November’s 3.2% and the first time the core index has a handle of 2 since March 2021. . We’re ultimately aiming for the Fed’s 2% target rate, so the closer we get to that core number, the less pressure there is to keep rates high for an extended period of time. Of course, we also don’t want the outlook to be so weak that it raises concerns that we’re headed for a hard landing. We want the Goldilocks number (again).
2. Gross domestic product. While certainly a hindsight, the release of the first 2023 Q4 GDP index on Thursday will give us a good idea of how the U.S. economy is holding up at an all-time high, and whether the federal funds rate is at an appropriate level or if it will tighten a bit. It will give you some insight as to what is going on.
3. Housing data. We’ll also take a look at the housing market, as the new home sales report for December will be released on Thursday and the pending home sales for December will be released on Friday. As before, havens remain a key thorn in the Fed’s mind when it comes to the thorny area of inflation, so we’re looking for signs of increased supply and lower list prices.
4. Revenue: Procter & Gamble’s quarterly release on Tuesday will highlight how its organic sales have fared as management seeks to maximize pricing power without too much of a negative impact on volumes. It will show you what is happening. Perhaps working in our favor is that while the current organic growth estimate is 4.4% (according to FactSet), Citigroup analysts this week said their checks are on the buy side, i.e. It highlights that it really shows important expectations in terms of stock reaction. For printed materials, it can range from 3% to 4%. In other words, expectations appear to have tempered, which is always a positive heading into the earnings release. Along with the foreign exchange impact (both in the reported quarter and this year’s forecast), the weak Chinese economy will also be an item to watch. Foreign exchange was a headwind last quarter. Another important focus is guidance. In its last conference call with investors, management was forced to lower its full-year sales outlook. Both companies reiterated their profit forecasts, but warned that they may be at the lower end of their range.
Monday, January 22nd
- Before the Bell: Bank of Hawaii (BOH)
- After the bell: United Airlines (UAL), Logitech International SA (LOGI), AGNC Investment (AGNC), Agilysys Inc (AGYS), Brown & Brown (BRO), Zions Bancorporation (ZION), CrossFirst Bankshares (CFB), Great Southern Bancorp (GSBC), Enterprise Financial Services (EFSC), Independent Bank Group (IBTX), Home Bancorp (HBCP), RBB Bancorp (RBB), SmartFinancial (SMBK), TrustCo Bank Corp NY (TRST)
Tuesday, January 23rd
- Before the Bell: Procter & Gamble Co. (PG); Verizon Communications (VZ), 3M Company (MMM), General Electric Co. (GE), RTX Corporation (RTX), Johnson & Johnson (JNJ), Halliburton Company (HAL), Lockheed Martin (LMT), DR Horton (DHI) , PACCAR (PCAR), Ericsson (ERIC), Community Bank System (CBU), GATX Corporation (GATX), MakeMyTrip Limited (MMYT), Old National Bancorp (ONB), Synchrony Financial (SYF), Webster Financial (WBS), Atlantic Union Bankshares Corporation (AUB), Invesco PLC (IVZ), Peoples Bancorp Inc (PEBO), Sandy Spring Bancorp (SASR)
- After the bell: Netflix (NFLX), Intuitive Surgical (ISRG), Texas Instruments Incorporated (TXN), Steel Dynamics (STLD), Baker Hughes (BKR), Stride (LRN), Canadian National Railway Company (CNI), NBT Bancorp ( NBTB), East West Bancorp (EWBC), Business First Bancshares (BFST), Covenant Logistics Group, Inc (CVLG), Hanmi Financial (HAFC), National Bank Holdings Corporation (NBHC), Premier Financial (PFC), QCR Holdings (QCRH ) ), Lunasant Corporation (RNST), Triumph Financial (TFIN), Trustmark (TRMK), Veritex Holdings (VBTX), Wesbanco (WSBC)
Wednesday, January 24th
- Before the Bell: AT&T (T), ASML Holding (ASML), Progressive (PGR), Abbott (ABT), Amphenol (APH), Freeport-McMoRan Copper & Gold (FCX), Elevance Health (ELV), Kimberly-Clark ( KMB ), SAP SE (SAP), Textron (TXT), New Oriental Education and Technology Group (EDU), BOK Financial (BOKF), First BanCorp (FBP), First Community (FCCO), General Dynamics (GD), Monro ( MNRO ), OFG Bancorp (OFG), Prosperity Bancshares (PB), Simmons First National (SFNC), TE Connectivity Ltd. (TEL), United Community Banks (UCBI), Blue Foundry Bancorp (BLFY), Capitol Federation Financial ( CFFN), HBT Financial (HBT), Teledyne Technologies (TDY)
- After: Tesla (TSLA), International Business Machines (IBM), ServiceNow (NOW), Las Vegas Sands Corp (LVS), Lam Research (LRCX), United Rentals (URI), WR Berkley Corp (WRB), Crown Castle International (CCI), Packaging Corporation of America (PKG), Seagate Technology plc (STX), CACI International, Inc (CACI), Knight-Swift Transportation Holdings (KNX), Ameriprise Financial Inc (AMP), Concentrix Corporation (CNXC), First Bank (FRBA), Liberty Energy (LBRT), ResMed (RMD), Pathward Financial (CASH), Columbia Banking System (COLB), CSX (CSX), NovaGold Resources (NG), RLI (RLI), Ethan Allen Interiors ( ETD ), Hexcel (HXL), Raymond James Financial (RJF)
Thursday, January 25th
- 8:30 a.m. ET: Durable Goods Orders
- 8:30 a.m. ET: Gross Domestic Price Index
- 8:30 a.m. ET: Initial unemployment claims.
- 10 a.m. ET: New Home Sales.
- Before the bell: American Airlines Group (AAL), NextEra Energy Inc (NEE), Alaska Air Group (ALK), Dow Chemical Co. (DOW), Valero Energy (VLO), Blackstone (BX), Southwest Airlines Co. (LUV) ), Nextera Energy Partners LP (NEP), Sherwin-Williams Co. (SHW), Union Pacific (UNP), Applied Industrial Technologies (AIT), Mobileye Global (MBLY), Northrop Grumman (NOC), Comcast (CMCSA), Nokia (NOK), TAL Education Group (TAL), West Bancorporation (WTBA), Murphy Oil (MUR), McCormick & Company, Incorporated (MKC), Valley National Bancorp (VLY)
- After the Bell: Intel (INTC), Visa Inc (V), Arthur J. Gallagher & Co. (AJG), KLA Corporation (KLAC), Western Alliance Bancorporation (WAL), Capital One Financial (COF), T-Mobile US (TMUS), Levi Strauss & Co. (LEVI), L3Harris Technologies (LHX), AppFolio (APPF), Western Digital (WDC), FICO (FICO), CVRx (CVRX), Olin Corporation (OLN)
Friday, January 26th
- 8:30 a.m. ET: Personal Expenses and Income
- 10 a.m. ET: Pending home sales.
- Before the bell: American Express Co. (AXP), Booz Allen Hamilton Holding Corporation (BAH), Autoliv (ALV), Colgate-Palmolive Co. (CL), Norfolk Southern Corporation (NSC), First Citizens BancShares (FCNCA), BankUnited ( BKU), Badger Meter (BMI), Dime Community Bancshares (DCOM), First Hawaiian, Inc (FHB), Gentex (GNTX)
(look here Click here for a complete list of Jim Cramer’s Charitable Trust stocks. )
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