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In this week’s newsletter, you’ll read about…
🏢 What does the next 6-9 months look like? Stock market roadmap 🗺
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📖 Roadmap + Recap
What does the next 6-9 months look like?
Let us start with a reminder of what has happened thus far.
1. The Fed hinted that inflation may be too hot to cut rates in March. Does this mean it will happen in May?
2. The fed has teased at this rate cut concept for months now. At what point does the market stop believing them?
3. Key earning reports have been reported. Key earnings from the Magnificent 7 have led the market to trade a new high after the FOMC meeting. It did not disappoint, but it definitely didn’t make the market and listeners happy.
In my opinion, a few things can occur, not that the Fed has let some uncertainty enter the minds of investors
1. We do not cut rates, and the market starts to find a mid-term top near 5000-5200 on the E-mini.
2. We cut rates, knowing that inflation will bounce higher by moving too fast. This could be bullish initially but could be bearish in the longer term.
Now, you may be thinking I sound bearish. On X, I commented, “Levels can be tested.” This doesn't mean a market crash.
The feds have done better than expected when it comes to managing this fireball of a market, but even if you are bullish, you understand deep pullbacks occur for a trend continuation.
So, yes, due to uncertainty in the market and possible narrative changes in upcoming Fed meetings, I am expecting the
1. $SPY to trade in a wide range as low as while key companies like $AMZN lead the way. (View Amazon’s most recent earnings report)
or
2. Valued information Technology, health care, and Communications Services sectors rotate higher from their 2023 lows. (Get access when we add to our long-term investments)
Bullish/Bearish Trend Idea (Zoomed Out)
Zoomed In
PIVOT:4810-4790
Confirmation of support turns resistance. This level could offer short-term bullish movement intraday before breaking the low
Downside Tests:
4615-4570 and 4430-4370
💲Earning Reports
Earnings
Key reports from the previous week.
Amazon
Amazon's key AWS unit's sales increased 13% from a year earlier
CEO Brian Olsavsky says, "We're looking for ways to increase our advertising," he said — and not just across streaming services like Prime Video, but also on platforms like Freevee and Twitch.
Bezos plans on selling 50 million Amazon shares during the next 12 months
More recap information from Business Insider.
Read more on holiday sales and ad revenue here
Full earnings report here
Apple
Full earnings report here
China has been an issue for Apple. Revenue in China slid 13% from last year. In contrast, sales increased in Europe and Japan.
Apple’s Vision Pro Reviews
Meta may still have the better bang for your money. If you can't afford the $3,499 mixed reality headset, there are cheaper options like the Meta Quest 3, which starts at $499.99 and is very similar to the Vision Pro.
Meta
During a time when Meta may not had the best earnings report, CEO Mark Zuckerberg made investors happy
Despite Meta’s Reality Labs losing a record $4.65 billion, they have announced the following:
Stock Buy-Back
For 1st time in history, they will offer dividends to investors.
General revenue: For the fourth quarter, Meta reported adjusted earnings per share (EPS) of $5.33 on revenue of $40.11 billion. Analysts were anticipating adjusted EPS of $4.94 on revenue of $39.01 billion, according to Bloomberg consensus data.
Read more here
Key Upcoming Earnings:
PLTR (Palantir Technologies Inc) | Jan 5 | Forecast 0.04 per share
SPOT (Spotify Technology) | Jan 6. | Forecast = -0.37 per share,
UBER (Uber Technologies Inc) | Jan. 7 | Forecast 0.16 per share,
CVS (CVS Health Corp.) | Jan 7 | Forecast 1.98 per share,
$BABA (Alibaba Group Holdings Ltd) | Jan 7 | Forecast $2.73 per share,
$PYPL (Paypal) | Jan 7 | Forecast $1.36 per share
Other Earnings: https://twitter.com/eWhispers
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News
Scorching US economy throws off market's Fed cut narrative
That narrative has been jolted by evidence that the economy may be running too hot for the Fed to cut rates without risking an inflationary rebound. Friday's blockbuster U.S. employment number was the latest sign of stronger-than-expected growth after Fed Chairman Jerome Powell days earlier deflated hopes the central bank would begin lowering rates in March.
"January job growth figures were strong, possibly too strong," said Russell Price, chief economist at Ameriprise, in a Friday note. "There were multiple signs of strong wage growth which could filter through to resurgent ... inflation pressures if maintained."
Thoughts:
It can seem as if the narrative is changing from “rate cuts and controlled inflation” to a reverse pivot, stating “inflation may still be too hot to touch.”
The recent rally has been based on rate cuts sooner than later. The more the fed pushes this narrative under the rug, the less the investors and Citizens will believe them.
Read more here!
Chinese authorities are considering a Stock Stabilization Fund to stabilize the slumping stock market.
A stock stabilization fund is typically designed to intervene in the stock market to stabilize prices and prevent excessive volatility. In this context, the proposal is likely aimed at supporting and steadying the Chinese stock market by injecting a significant amount of funds.
Though many investors are looking to steer clear of China investments, there may be long-term value 10-15 years out if you can stomach the volatility.
Data Releasing This Week!
Stay tuned for Thursday’s Mid Week Reading on
Upcoming companies set to IPO and the 7 Best Investments in 2024 posting Feb. 15th
Stocks on the radar 👀
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SNAP
F
BABA
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