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Sizing Up the S&P 500
- S&P 500 holds December 20 low, ended Wednesday 1% from record high
- 1/5 low near 50% retracement of December rally
- Failure to test July high may trigger continued upside
Key News
- Employment weakens:
- Amazon.com (AMZN) cuts 500 jobs at Twitch, “several hundred” at Prime Videos, MGM Studios.
- S&P Global: Fewer temp jobs reflect weaker labor market.
- Unity Software (U) cuts 25% of staff
- Walmart (WMT) teams with Alphabet (GOOGL) on drone deliveries
- Fedspeak:
- Michelle Bowman drops hawkishness, doubts further hikes
- Raphael Bostic: Inflation has fallen quicker than expected
- Intuitive Surgical (ISRG) nears all-time highs after preannouncing strong results
- Fannie Mae: “Significantly” better sentiment toward mortgage rates
- Palantir Technologies (PLTR) jumps on potential Israel demand
- Semiconductor Industry Association (SIA) expects double-digit chip growth in 2024
- S&P Global: Merger activity recovering from slow period
- Wells Fargo raises S&P 500 target range from 4,600-4,800 to 4,800-5,000, citing potential rate cuts.
- New York Fed inflation expectations hit lowest since January 2021
- November consumer credit growth more than 2x forecasts (potential confirmation of strength)
Energy Weakness Continues
- EIA: U.S. crude oil production to grow 290K barrels per day in 2024, hit records in next 2 years
- Saudis cut Arab Light crude price to 27 month low
- EIA: U.S. crude oil inventories rise more than expected. Gasoline inventories +8 million barrels
Sector Watch
- Early-quarter buying in large-cap growth: technology, consumer discretionary, communications
- Airlines bounce as oil remains weak
- Biotechnology gains amid M&A, J.P. Morgan conference
- Homebuilders advance following December breakout
- Energy leads to downside
- Chinese stocks, solar energy remain under pressure
- Gold miners weak despite rate-cut expectations
Mover of the Week: Natera
- Genetic-testing company preannounces Q4 revenue about 9% above estimates on 1/9
- Earnings, revenue beat on 11/8, 8/3
- IPO in June 2015
- NTRA +55% in 12 months, near two-year high
Upcoming Events
- Fri 1/11: Producer price index (PPI)
- Earnings: JPM, BAC, C, WFC, UNH
- Sat 1/13: Taiwan elections
- Mon 1/15: Market closed for MLK day
- Tues 1/16
- Earnings: GS, MS
- Wed 1/17: Retail sales
- Earnings: SCHW, USB
- Thu 1/18: Housing starts/building permits, initial jobless claims
- Earnings: TSM, KEY
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