Today’s Big Picture
Asia-Pacific equity markets finished the day mixed. Australia’s ASX All Ordinaries gained 0.65%, Taiwan’s TAIEX added 0.76% and Japan’s Nikkei closed 1.62% higher after closing out a tech-fueled rally last week. South Korea’s KOSPI declined 0.34%, Hong Kong’s Hang Seng fell 2.27%, and China’s Shanghai Composite slid 2.68% after the central bank left rates unchanged (more below). India’s markets are closed today as the country marks the consecration of a new and long-awaited temple celebrating Ram in the city of Ayodhya, believed to be the birthplace of the deity. Major European markets are up across the board in midday trading and U.S. equity futures are pointing to a higher open.
With little in the way of fresh news this morning, the stock market looks to continue the upward march that established a new all-time high for the S&P 500 on Friday. We are back to the regular grind with a full week of trading that brings over 430 companies issuing quarterly results and guidance, and three pieces of economic data that could throw some cold water on the market.
Based on the latest swath of company guidance, investors may re-think 2024 EPS expectations for the S&P 500, something that would trigger market valuation questions. As that guidance is being issued, economic data out later this week could support a more measured approach to rate cuts this year by the Fed.
Data Download
International Economy
The People's Bank of China maintained its lending rates at the January fixing, as the central bank continued its attempt to support an economic revival. The one-year loan prime rate (LPR), which is the medium-term lending facility used for corporate and household loans, was kept unchanged at a record low of 3.45% for the fifth consecutive month; and the five-year rate, a reference for mortgages, was held at 4.2% for the seventh straight month.
Oil prices are moving lower this morning amid renewed concerns for global growth offset geopolitical concerns in the Middle East and an attack on a Russian fuel export terminal over the weekend.
Domestic Economy
At 10 AM ET, the December Leading Indicators report will be released, and the market sees the headline figure falling 0.3% MoM.
Markets
Friday saw a pickup in sentiment as Technology (2.31%, Communication Services (1.35%), and Financials (1.61%) led equities higher. Consumer Staples (-0.29%) and Utilities (-0.13%) were the only casualties as traders rotated out of those traditionally defensive stocks. Broad indexes set a happier tone heading into the weekend as the Dow rose 1.05%, the Russell 2000 gained 1.08%, the S&P 500 added 1.23% and the Nasdaq Composite closed 1.70% higher.
While the usual suspects (Splendid Six) helped drive returns on Friday, Broadcom (AVGO) had a strong showing, up 5.88% after analysts at Goldman Sachs (GS) reinstated coverage on the company with a “Buy” rating and a price target 16% above current levels. Here’s how the major market indicators stack up year-to-date:
- Dow Jones Industrial Average: 0.46%
- S&P 500: 1.47%
- Nasdaq Composite: 2.00%
- Russell 2000: -4.08%
- Bitcoin (BTC-USD): -0.93%
- Ether (ETH-USD): 8.46%
Stocks to Watch
Bank of Hawaii (BOH) is expected to release quarterly earnings before equities begin trading later this morning. Pre-market breadth is healthy today as 252 names in the S&P 500 have traded hands so far this morning with 175 gainers and 77 decliners. Names being bid up this morning include Southern Company (SO), PayPal (PYPL), and Monolithic Power Systems (MPWR) while Archer-Daniels Midland (ADM) stands out as coming under notable pressure (more below).
Archer-Daniels Midland issued downside 2023 EPS guidance with EPS expected to be above $6.90, which suggests it will fall short of the $7.29 consensus. ADM also expects to delay its earnings release and conference call relating to its 4Q 2023 and full year 2023 financial results, as well as the filing of its Annual Report on Form 10-K for 2023. No timing for either was given.
Boeing (BA) shares are once again moving lower in pre-market trading following a regulatory recommendation for door plug inspections on an additional 737 model.
Macy's (M) rejected a $21.00 per share takeover offer from investment firms Arkhouse Management and Brigade Capital Management. The company confirmed it received an unsolicited, non-binding proposal from Arkhouse Management and Brigade Capital Management to acquire all the outstanding shares of the company for $21.00 per share in cash on December 1, 2023.
Sony (SONY) terminated its $10 billion merger deal between its Indian unit with local broadcaster Zee Entertainment and is seeking $90 million in termination fees.
IPOs
Readers who want to dig deeper into the upcoming IPO calendar should visit Nasdaq’s Latest & Upcoming IPOs page.
After Today’s Market Close
United Airlines (UAL) and Zions Bancorp (ZION) are expected to report quarterly results after equities stop trading today. Those looking for more on upcoming quarterly earnings reports should head on over to Nasdaq’s Earnings Calendar.
On the Horizon
Tuesday, January 23
- Japan: Bank of Japan Interest Rate Decision
- Eurozone: Flash Consumer Confidence - January
Wednesday, January 24
- Japan: Jibun Bank Flash Manufacturing and Services PMIs – January
- Eurozone: HCOB Flash Manufacturing and Services PMIs – January
- US: Weekly MBA Mortgage Applications
- US: S&P Global Flash Manufacturing and Services PMIs – January
- US: Weekly EIA Crude Oil Inventories
Thursday, January 25
- Eurozone: European Central Bank Interest Rate Decision
- US: Weekly Initial & Continuing Jobless Claims
- US: Durable Orders – December
- US: GDP – 4Q 2023
- US: New Home Sales – December
- US: Weekly EIA Natural Gas Inventories
Friday, January 26
- Japan: Tokyo CPI – January
- Japan: Leading Economic Index (Final) – November
- US: Personal Income & Spending, PCE Prices – December
- US: Pending Home Sales – December
Thought for the Day
“I am not what happened to me. I am what I choose to become.” ~ Carl Jung
Disclosures
- Broadcom (AVGO) is a constituent of the Tematica BITA Digital Infrastructure & Connectivity Index
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Other Topics
Stocks Economy Earnings Central Banks
Chris Versace
Christopher (Chris) Versace is the Chief Investment Officer and thematic strategist at Tematica Research. The proprietary thematic investing framework that he’s developed over the last decade leverages changing economic, demographic, psychographic and technology landscapes to identify pronounced, multi-year structural changes. This framework sits at the heart of Tematica’s investment themes and indices and builds on his more than 25 years analyzing industries, companies and their business models as well as financial statements. Versace is the co-author of “Cocktail Investing: Distilling Everyday Noise into Clear Investing Signals” and hosts the Thematic Signals podcast. He is also an Assistant Professor at NJCU School of Business, where he developed the NJCU New Jersey 50 Index.
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Mark Abssy
Mark Abssy is Head of Indexing at Tematica Research focused on index and Exchange Traded Product development. He has product development and management experience with Indexes, ETFs, ETNs, Mutual Funds and listed derivatives. In his 25 year career he has held product development and management positions at NYSE|ICE, ISE ETF Ventures, Morgan Stanley, Fidelity Investments and Loomis Sayles. He received a BSBA from Northeastern University with a focus in Finance and International Business.
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