Indices
- Dow 43,487, +1,549 or +3.69%.
- Nasdaq 19,630, +469or +2.45%.
- S&P 5,996, +169or +2.90%.
- MSCI EAFE 2314.13, +69.19 or +3.08%.
- USD10Y 4.609%, -16.7bp or -3.50%.
- WTI Crude $77.88/bbl, +$1.31 or +1.71%.
Inflation Not So Bad?
One week after the market tanked on inflation fears from a little-known piece of the ISM Services report that indicated rising prices in December, both wholesale and retail price data reported this last week reflected a weakening in inflation for the month of December and markets reversed and exploded higher.
As we await Q1 earnings season to begin in earnest (this is a light week after the banks kicked off the Q1 season last week) it will be very important for companies to report good numbers and increase their future projections to continue this bull market. Why? Well, the S&P 500 is currently trading at 21 times forward earnings vs its historical average of 18 times. Further multiple expansion is unlikely (statistically speaking) and thus earnings must be robust to give this rally continued momentum.
The Upcoming Week: Jan 20 – Jan 24
It is a slow week with very little economic data points and just one earnings release that could move the market; Netflix (NFLX) on Tuesday.
Economic Calendar
- Monday – Markets Closed in Observance of MLK Jr Day.
- Tuesday – N/A. Earnings: Netflix (NFLX), Seagate Technology (STX), United Airlines (UAL).
- Wednesday – N/A. Earnings: N/A.
- Thursday – Initial Jobless Claims. Earnings: American Airlines (AAL), CSX (CSX).
- Friday – January S&P Flash Services and Manufacturing PMIs. Earnings: American Express (AXP).
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Disclaimer: This is not a recommendation to buy or sell any of the securities listed above. I personally, or a family member whose account I control, have positions in the following securities/assets...Bitcoin, Ethereum, Solana, ACHR, BITB, NVDA, and RIVN.