Downloads available here and here.

Sizing Up the S&P 500

  • S&P 500 is challenging mid-September high and March lows around 4120.
  • 10-day moving average rising for 23 candles, the longest streak since August.
  • Fewer index members above 20-day MA than above 50-day MA. (See MT Breadth chart.)
  • RSI oscillator falling.
  • Wednesday was the 1st failure to hold a 50% retracement this year.
  • Intermarket: U.S. dollar index climbs after bullish outside week.
  • Intermarket: Two-, 10-year Treasury yields continuing higher.
  • Inflation optimism has been priced in, but seven weeks remain until next Federal Reserve meeting.
  • Nasdaq-100 at potential resistance.

Key Economic News:

  • Jerome Powell incrementally less hawkish on 2/7.
    • Remember: Several more events before 3/22 meeting and dot plot.
    • Lisa Cook: No need for “large increase in unemployment.”
    • John Williams: 5.1% peak rate from last dot plot “very reasonable” for 2023. (Implies 50 basis points of further hikes.)
    • Chris Waller: “we have farther to go,” rates could go higher than expected.
  • January Non-farm payrolls +517K vs +185K est. Unemployment 3.4% (lowest since 1969) vs 3.6% estimate. But wage growth inline +0.3%
    • Morgan Stanley: Weather, California teacher strike, seasonal adjustment may have distorted job growth to the upside.
  • ISM services: 55.2 vs 50.4 estimate. New orders jump. Price growth eases.
  • CNBC: Wholesale egg prices have dropped 52% from December peak. Bird flu passes and demand eases.
    • Good news for CPI?

Company News

  • Apple (AAPL): Earnings, revenue miss but one-off items like currencies and supply chains blamed.
    • AAPL viewed as cleaner growth story than (AMZN) or Alphabet (GOOGL), which face weaker demand.
  • Travel Stocks Climb:
    • Uber Technologies (UBER) earnings, revenue beat, margins improve. Bookings +19%, forecast +20-24% in Q1.
    • Royal Caribbean (RCL) earnings beat, revenue misses. Wall Street may focus on pricing/margins as business fundamentals improve.
    • Hertz (HTZ) earnings beat, revenue inline. Strong demand environment apparently supports pricing/margins.
      • Avis Budget (CAR), which reports 2/13, also climbed.
  • Cybersecurity gains on government spending.
    • Dan Ives of Wedbush bolsters Fortinet (FTNT) and Tenable (TENB)
  • Freshworks (FRSH) earnings, revenue beats. (Down ~50% from September 2021 IPO)
    • Recent bullish notes by Cantor Fitzgerald, Needham, Canaccord Genuity, Morgan Stanley
  • Buybacks, dividends offset mixed results: Skyworks Solutions (SWKS), Du Pont (DD).
  • M&A news & speculation:
    • CVS Health (CVS) buys Oak Street Health (OSH)
    • Criteo (CRTO) exploring sale: Reuters
    • Danaher (DHR) considers buying Catalent (CTLT): Bloomberg
    • Public Storage (PSA) makes unsolicited bid for Life Storage (LSI)
  • Voya Financial (VOYA): Earnings beat. BofA raises price target.
    • Short interest is 25% of float.
S&P 500, daily chart, with key technical indicators and levels.

Leaders & Laggards

  • Growth stocks extended their lead over value in the past week.
  • Software, cybersecurity, recent IPOs outperform
  • Global weakens
  • Banks & financials quietly challenge resistance
  • Safe havens like utilities and consumer staples continue to lag
  • Pharma & biotech struggle

Signals Scan

  • Occidental Petroleum (OXY): “Death cross”
  • Chevron (CVX) slides under 50-day MA after failed gap
  • LKQ (LKQ): Holds rising 50-day MA
  • Tesla (TSLA): Stalls after 50% retracement
  • AT&T (T) nears bottom of Keltner channel

Mover of the Week: (AI) started climbing in late January as “ChatGPT” trended on Google search. The rally and volume accelerated after it announced a new artificial intelligence product suite on January 31.

  • AI reports earnings after the bell 3/2.

Upcoming Events

  • Tuesday, 2/14: CPI inflation
    • Likely the main item in the coming week
  • Wednesday, 2/15: Retail sales
    • Cisco Systems (CSCO) reports in post market.
  • 2/15 & 2/16: Housing active with NAHB sentiment, starts & permits
  • Thursday, 2/16: PPI
    • Applied Materials (AMAT) reports in post market.

Using the Platform

Platform tool of the week: Scanning for recent IPOs

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