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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
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:
- Large dovish revision to Q3 productivity and labor costs.
- Historic change in AAII investor survey.
- Sharp improvement in consumer sentiment (attributed to inflation easing).
- CME FedWatch Tool: 75% odds of cut in March (up from 38% a week before).
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
| ETF | 1 Year | 5 Years | 10 Years |
| SPDR S&P 500 ETF (SPY) | +11.95% | +65.57% | +152.22% |
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