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Sizing Up the S&P 500

  • Dow Jones Industrial Average closes at record high
  • S&P 500 ended Thursday at highest level since January 2022.
  • 90 members of the S&P 500 make new 52-week highs, the most since May 2021.
  • Advance / Decline Line at record high
SPDR S&P 500 ETF (SPY), with select indicators and patterns.

Fed’s Big Change

  • Statement says “Inflation has eased over the past year.” (First acknowledgement of improvement.)
  • Dot plot suggests 3 cuts next year, versus roughly 1 cut in September.
  • Powell: “economic activity has slowed substantially” this quarter
  • Fed lowers 2024 PCE inflation forecast from +2.6% to +2.4%
  • Adds “any”: “In determining the extent of any additional policy firming.”
    • Viewed as suggesting less certainty about hikes.
  • Fed move follows other potentially significant changes since early November:
  • CME FedWatch Tool: 75% odds of cut in March (up from 38% a week before).
Interest rate projections for next year from September 2023 and December 2023 Fed dot plots.

Key News

  • December consumer sentiment beats. Inflation expectations improve sharply. Political fears easing.
  • November CPI inline with forecasts
  • November PPI slightly below forecasts
  • Dan Primack of Axios: M&A recovering in late 2023 after weak 1H
  • Charlie Bilello of Creative Planning: Wages outpacing inflation after lagging for 25 months
  • Ed Yardeni targets new highs for S&P 500
    • 2024 yearend: 5400 in 2024
    • 2025 yearend: 6000 in 2025
  • FactSet: Average of analyst price targets see S&P 500 ending 2024 at 5068.
  • HSBC sees S&P 500 ending next year at 5000
  • November payrolls, unemployment, wages beat by narrow margin
  • Ford Motor (F) halves electric F-150 production target for 2023
  • Tesla (TSLA) recalls 2mln vehicles on autopilot worries
  • Etsy (ETSY) cuts jobs amid weak demand
    • Meanwhile traditional brick & mortar rebounds
  • Oil inventories drop with futures trying to hold early-July breakout level

Mover of the Week: Samsara

  • “Internet of things” software provider has beaten estimates for at least 5 straight quarters
    • Products help manage truck fleets, facilities, equipment, security
  • Customers +49% y/y
  • Priced IPO at $23 on 12/14/21
  • IOT +188% YTD after hitting record high on 12/6

Using the Platform

  • Finding new highs with Scanner and RadarScreen

Upcoming Events

  • Fri 12/15: Quadruple witching
  • Mon 12/18: NAHB homebuilder confidence
  • Tue 12/19: Housing starts, building permits
    • Earnings: FDX
  • Wed 12/20: Existing home saales, crude oil inventories
    • Earnings: MU
  • Thu 12/21: Jobless claims
    • Earnings: NKE

Standardized Performances for ETF mentioned above

ETF1 Year5 Years10 Years
SPDR S&P 500 ETF (SPY)+11.95%+65.57%+152.22%
As of Nov. 30. Based on TradeStation Data.

Security futures are not suitable for all investors. To obtain a copy of the security futures risk disclosure statement Investment and Trading Disclosures Booklet – Futures.Exchange Traded Funds (“ETFs”) are subject to management fees and other expenses. Before making investment decisions, investors should carefully read information found in the prospectus or summary prospectus, if available, including investment objectives, risks, charges, and expenses. Click here to find the prospectus.

Options trading is not suitable for all investors. Your TradeStation Securities’ account application to trade options will be considered and approved or disapproved based on all relevant factors, including your trading experience. See Characteristics and Risks of Standardized Options.

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