/ January 24
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Friday:
Existing Home Sales (4.16M exp.)
S&P Global Services PMI -
Friday:
American Express AXP
NextEra Energy NEE
Verizon Communications VZ
Daily Briefing
*Yesterday's session started with mixed action, yet ended on a positive note thanks to an influx of buying in the afternoon; blue-chip companies led the charge, showing strength through the entire session while mega cap stocks weighed down the S&P 500 (+0.5%) and Nasdaq Composite (+0.2%) in the early going;
*The afternoon surge led the S&P 500 to a fresh record high, powered by turnaround action in names like NVIDIA (NVDA, +0.1%), Amazon.com (AMZN, +0.2%), and Microsoft (MSFT, +0.1%);
*SPY broke through technical resistance at $607 (M-Trend), and this level now becomes support, with downside at the 50-DMA ($596); assuming that the rally continues, technical upside now resides at $645;
*The MACD signal suggests gains might be limited in the next period, as the histogram extension reaches previous levels where we’ve seen some tapering occur; in other words, we might see a slight consolidation ahead of further gains;
*The Dow Jones Industrial Average outperformed its peers, trading higher through most of the session; Goldman Sachs (GS, +1.1%), UnitedHealth (UNH, +1.9%), and Caterpillar (CAT, +2.2%) drove gains in the price-weighted index;
*Other blue-chip names like GE Aerospace (GE, +6.6%) and Union Pacific (UNP, +5.2%) surged after encouraging earnings results and guidance, boosting the S&P 500 industrial sector (XLI, +1.0%) near its technical resistance;
*Some interesting comments came from President Trump who spoke to the World Economic Forum in Davos; in his remarks, the president said he will press OPEC and Saudi Arabia to lower oil prices, that he expects NATO countries to boost their defense spending to 5% of GDP, and he made it known that foreign companies producing products in the U.S. could enjoy a lower tax rate (or tariffs if they don't);
*The market was also digesting the latest weekly jobless claims report, which showed a larger than expected increase in initial claims (223K) and the highest level for continuing claims since November 2021; the elevated level of continuing jobless claims connotes some increasing challenges in finding new employment after being laid off; this jibes with the lower quits rate data that we’ve seen recently;
*Notably, the president also indicated that he is going to demand lower interest rates; CNBC, citing a Reuters report, added that Mr. Trump is considering talking to the Fed and that he expects the Fed to listen to him when it comes to interest rates (this will be fun to watch);
*Lower interest rates are broadly expected at this point in 2025, but there’s also a minor probability of a hike being priced in for 2026:
*Calm action in Treasuries also supported the afternoon pop; the 10-yr yield settled four basis points higher at 4.64% (after hitting 4.80% last week) and the 2-yr yield settled two basis points lower at 4.28%;
*TLT lost -0.78% and remains well below our stop-loss level ($89);