/ January 23
Daily Briefing
*Yesterday’s market was somewhat of a split affair, with some selling pressure present at the small caps level and in a majority of sectors; the S&P 500 (+0.6%) did manage to reach a fresh all-time high of 6,100.81, powered by mega caps and chipmakers;
*The Vanguard Mega Cap Growth ETF (MGK) closed +1.7% higher while the PHLX Semiconductor Index (SOXX) gained +1.7%, buoyed by enthusiasm around AI initiatives; this followed President Trump’s $500 billion AI infrastructure announcement, which brought together notable industry leaders like Oracle's (ORCL, +6.8%) Chairman Larry Ellison, SoftBank CEO Masayoshi Son, and OpenAI CEO Sam Altman, helping propel sentiment in the tech space;
*SPY is now directly challenging resistance at the previous highs and the M-Trend level ($607); the benchmark equities ETF is now officially “Overbought” in the medium term, having rebounded nicely from the 100-DMA, where support was established ($581); normally, we should see some consolidation here before further gains;
*The MACD signal continues to indicate higher highs in the following sessions; with the end of January approaching and SPY returning +3.7% on the month, it does look like we’ll have a positive January indicator after all;
*Notably, there is still room for substantial momentum improvement across the major S&P Sectors; so far, the only two sectors to experience both Positive MACD signals on the daily and on the weekly are Consumer Discretionary (XLY) and Energy (XLE); all of the other sectors are still recording Negative medium term trends;
*While yesterday was positive at the headline index level, market internals painted a different picture; at both the NYSE and Nasdaq, decliners outpaced advancers and the equal-weighted S&P 500 closed -0.4% lower; also, the Russell 2000 (-0.6%) and S&P Mid Cap 400 (-0.4%) closed lower, in a sign of weak breadth;
*This more subdued performance comes after a period of notable outperformance to kick off the year; the Russell 2000 and S&P Mid Cap 400 are still +3.2% and +5.3% higher, respectively, in 2025; notably, Mid-Caps (MDY) are the second best performing factor after Momentum (MTUM) in 2025;
*Netflix (NFLX, +9.7%) was one of the day’s standout performers, surging after delivering the largest quarter of global streaming paid net ads in its history; Blue-chip names, including Procter & Gamble (PG, +1.9%) and Dow component Travelers (TRV, +3.2%), were also among the standouts, reporting strong earnings that bolstered investor confidence;
*There were no notable economic releases on the day;
*The 10-yr yield settled three basis points higher at 4.60% and the 2-yr yield settled two basis points higher at 4.30%; treasuries moved to session lows after the $13 billion 20-yr bond reopening, which met stellar demand;
*TLT lost -0.52% and remains well below our stop-loss level ($89);