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Wall Street Street | Great Day For Volume Stocks on Fresh Index Records

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Moomoo Recap US wrote a column · Jan 22 15:13
Wall Street Street | Great Day For Volume Stocks on Fresh Index Records
RECAP
U.S. stocks advanced on Monday, building off a record finish ahead of the ramping up of fourth-quarter earnings season.
The $Dow Jones Industrial Average(.DJI.US)$ rose 138 points, or 0.26%, to 38,000. The $S&P 500 Index(.SPX.US)$ was up 10 points, or 0.22%, at 4,850. The $Nasdaq Composite Index(.IXIC.US)$advanced 49 points, or 0.32%, to 15,360.
While the S&P 500 finally returned to record territory on Friday, skeptical investors question the rally's staying power given stretched valuations.
"With forward multiples already at historic peaks and earnings forecasts for 12 months forward ambitious, equity market gains may stall in 2024, as better earnings are met with lower valuation multiples characteristic of a midcycle or soft-landing environment," Lisa Shallett, chief investment officer at Morgan Stanley Wealth Management, said in a note.
While 2023 S&P 500 Index earnings are currently forecast to land at $219-$221, the 2024 consensus is running at $242-$244. Morgan Stanley estimates are slightly below that, she said.
"To push the index through 5,000, investors will need to confidently price upside to $250 by midyear. This is a potential stretch, given the level of uncertainty we expect," she wrote.
Matthew Tuttle, the chief executive and chief investment officer at Tuttle Capital Management, said the Magnificent Seven tech giants have now technically moved into overbought conditions.
MACRO
Fed Likely to Deliver First Rate Cut in March as Inflation Cools, UBS Says
The Federal Reserve is expected to start easing its monetary policy in March amid a continued decline in inflation, while policymakers seem set to keep their benchmark lending rate unchanged later this month, UBS Securities said.
To cool inflation, the central bank's Federal Open Market Committee has raised interest rates by 525 basis points since March 2022, with its last hike in July 2023. Last month, the FOMC held rates steady -- its third consecutive pause -- and lowered its median rate and inflation expectations through 2025.
"We continue to expect the FOMC to deliver its first cut of the cycle in March," UBS economists, including Pierre Lafourcade and Jonathan Pingle, said in a note e-mailed Monday. "The no-cut scenario appears to be a done deal for the January meeting." The FOMC will meet on Jan. 30-31.
On Friday, official data are likely to show that core personal consumption expenditure prices rose 0.15% last month, leaving annual core PCE inflation at 2.91%, down from November's 3.15% print and dropping below 3% for the first time since March 2021, according to the note. The firm projects 12-month core PCE inflation to ease to 2.4% in March.
"Our forecast of rapid core PCE disinflation in the next few months means a further no-cut decision in March would push up the real rate far above the [FOMC's Summary of Economic Projections'] assumption of 2.2% to 3%," the UBS economists said. "This real rate surge is an intensifying level of policy restrictiveness to a degree at odds with most committee members' stated preferences."
SECTORS
Oil Prices End at Highest Level in a Month on Supply Risks, 'Positive Risk Sentiment'
Oil prices settled Monday at their highest level in about a month, finding support from ongoing risks to global supplies as a rally in U.S. equities lifted prospects for the economy and energy demand.
$Crude Oil Futures(JUN4)(CLmain.US)$, the most actively traded contract, added $1.51, or 2.1%, at $74.76 a barrel.
Oil traders are "starting to realize with the stock market breaking record highs that it's unlikely that we're going to see an economic recession," Phil Flynn, senior market analyst at The Price Futures Group, told MarketWatch. That is "adding to demand expectations at a time when the supply situation looks to be tightening."
"Demand is going to exceed expectations if the economy continues to grow and that's going to leave a bigger supply deficit once we get deep into the new year," he said.
Tensions in the Red Sea and tensions between China and Taiwan show that the risk to oil supply is "high at the same time North Dakota oil production it took a hard hit from the cold, reducing output for at least the rest of the month," Flynn said.
Source: Moomoo
Source: Moomoo
COMPANIES
United Airlines Posts Q4 Earngins
$United Airlines(UAL.US)$ reported quarterly earnings of $2.00 per share which beat the analyst consensus estimate of $1.70 by 17.65 percent.
Biotech's Spyre and Gyre Rise with the Index Tide, Ginko and Gilead Fall
After two major indexes reached all-time highs, pharmaceutical stocks for companies in drug trials were caught up in the energy and rocketed forward. The largest gainers were $Spyre Therapeutics(SYRE.US)$, up 26% Monday morning, and $Gyre Therapeutics(GYRE.US)$ +10%.
But monday morning was not all roses for the biotech sector. $Gilead Sciences(GILD.US)$ after a phase three lung cancer treatment trial failed to meet goals. ZLAB Zai Lab fell 7%
Trump Stocks Rise with Chancs of New Hampsire Primary Blowout
Media stocks related to former president Donald Trumd soared Monday following Florida Gov. Ron DeSantis’ decision to drop out of the presidential race, seemingly boosting the odds that Trump wins the Republican nomination. $Digital World Acquisition Corp(DWAC.US)$, the special purpose acquisition company that’s scheduled to merge with Trump’s Truth Social social-media network, rallied.
Rumble Climbs after Barstool Deal
Shares of $Rumble(RUM.US)$ climbed after the video-streaming platform struck a partnership with digital-media company Barstool Sports.
Bulti-Billion Merger Sends NuStar Engery Rocketing
$Sunoco(SUN.US)$ and $NuStar Energy(NS.US)$ said Monday they have agreed to combine in an all-stock deal valued at about $7.3 billion, including debt. NuStar shares jumped 18%, while Sunoco shares dropped 4.4%.
Solar Stocks Rise Following SolarEdge's Layoffs
On Monday, $SolarEdge Technologies(SEDG.US)$, the manufacturer of solar power equipment, announced its plan towill lay off around 900 employees, which is equivalent to 16% of its workforce.
Other solar companies like $Sunrun(RUN.US)$, $Enphase Energy(ENPH.US)$, and $First Solar(FSLR.US)$ also experienced a rise in their share prices.
SoFi, Affirm Lead Fintech Shares Higher After as Student Borrowers Get $4.9B Relief
$SoFi Technologies(SOFI.US)$ and $Affirm Holdings(AFRM.US)$ shares advanced as fintech stocks rallied, after the Biden administration said Friday, it approved $4.9 billion in student debt relief, helping ease consumers' debt load.
Source: Bloomberg, Dow Jones, CNBC, Reuters
Disclaimer: This presentation is for informational and educational use only and is not a recommendation or endorsement of any particular investment or investment strategy. Indexes are unmanaged and cannot be directly invested into. Past performance is no indication of future results. Investing involves risk and the potential to lose principal. Investment information provided in this content is general in nature, strictly for illustrative purposes, and may not be appropriate for all investors. It is provided without respect to individual investors’ financial sophistication, financial situation, investment objectives, investing time horizon, or risk tolerance. You should consider the appropriateness of this information having regard to your relevant personal circumstances before making any investment decisions. Past investment performance does not indicate or guarantee future success. Returns will vary, and all investments carry risks, including loss of principal. Moomoo makes no representation or warranty as to its adequacy, completeness, accuracy or timeliness for any particular purpose of the above content. See this link for more information.
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