/ January 17
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Friday:
Building Permits Prel (1.46M exp.)Housing Starts (1.32M exp.)
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Friday:
SLB SLB
Regions Financial RFState Street STT
Daily Briefing
*The stock market traded mixed following the post-CPI surge; the Nasdaq Composite underperformed its peers, dropping -0.9%, while the Dow Jones Industrial Average (-0.2%) and S&P 500 (-0.2%) traded around their prior closing levels; the Russell 2000 eked out a +0.2% gain;
*There was a big batch of economic data, earnings news, and headlines to digest and most of them could've acted as support for the stock market; retail sales and weekly jobless claims reflected ongoing strength in the economy and labor market, Treasury Secretary nominee Scott Bessent reiterated at his confirmation hearing that the U.S. must get its fiscal house in order while also pursuing pro-growth policies, and Fed Governor Waller (FOMC voter) said he believes that there could possibly be 3-4 rate cuts this year, depending on the data;
*SPY is grappling with its resistance area which is sitting just overhead; while the 20-DMA has been broken through, the 50-Day average and the M-Trend level still pose significant overhead resistance; at current prices, SPY is also no longer oversold (48/100); a superficial level of support stands at $578 (100-DMA), while more bids should arrive in the $550 - $560 area, near the 200-DMA (-5.7% potential loss);
*The MACD signal is about to turn positive, on just one or two sessions with constructive price action;
*Losses in some influential names prevented SPY from closing above the 50-DMA; Apple (AAPL, -4.0%), NVIDIA (NVDA, -2.0%), Tesla (TSLA, -3.4%), Amazon.com (AMZN, -1.2%), Meta Platforms (META,-0.9%), and Microsoft (MSFT, -0.4%) were among the standouts in that respect;
*In fact, among the top 10 S&P 500 stocks, it was only a positive day for Lilly (LLY, +1.45%) and Broadcom (AVGO, +0.62%);
*Some companies that reported earnings traded lower despite better-than-expected results; Bank of America (BAC, -1.0%) and US Bancorp (USB, -5.6%) were among them while Morgan Stanley (MS, +4.0%) hit a fresh 52-week high in response to earnings;
*Dow component UnitedHealth (UNH, -6.0%) was another name that reported results, stumbling after reporting Q4 and year-end results that featured a higher medical care ratio;
*Losses in some of the aforementioned names weighed down the S&P 500 information Tech (XLK, -0.77%), Communications (XLC, -0.57%), and Consumer Discretionary (XLY, -0.54%) sectors while the remaining 9 sectors registered gains ranging from +0.4% (health care) to +2.53% (utilities);
*December Retail Sales came in at 0.4%, slightly below expectations of 0.5%; retail sales, which are not adjusted for price changes, were more subdued than expected in December, suggesting consumers spent in a more considerate manner; importantly, though, they remained inclined to spend;
*Weekly Initial Claims came in at 217K, slightly above expectations of 212K; there was nothing disruptive about it in terms of the market's understanding that the labor market, overall, continues to be in pretty good shape;
*Notably, there is some speculative energy helping to boost things with rate cut enthusiasm driving European bourses and market participants cognizant that a new administration will officially be in office when markets reopen Tuesday (they are closed Monday for Martin Luther King, Jr. Day);
*Bloomberg reports that incoming President Trump is planning an executive order to declare cryptocurrency a national priority; separate reports indicate Mr. Trump might unleash a cascade of executive orders on day one;
*Treasury yields declined after Fed Governor Waller's speech; the 10-yr yield settled 5 basis points lower at 4.61% and the 2-yr yield settled two basis points lower at 4.24%;
TLT continues to trade far below our stop-loss level ($89.2) and remains uninvestible;