Market Insights

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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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