Bookends: Monday 01/08/24
Looking Ahead at the Week of Jan. 8th thru Jan. 12th
Phil’s Outlook
Happy Monday Everyone!
The market continued its new year caution last week and ended its 9-week win streak. The markets were down for the week, with the S&P 500 down 1.5%, the Nasdaq 3.3%, and the Dow Jones 0.6%. I continue to believe that this is what we can expect for the rest of January and possibly February. A slow, general downward correction punctuated by occasional good weeks. We have a market primed for rate cuts that won’t see those rate cuts until March at the earliest. We continue to see positive numbers on employment and wages, but cost-of-living remains high. The American Association of Individual Investors weekly survey has 49% of respondents with a bullish outlook (up 3% over last week) and Bank of America Bull-Bear Indicator ticked up from 5.1 to 5.3. The market wants to be optimistic, but the current economic climate can only sustain so much optimism until we see more movement on interest rates and inflation. Put it all together and I think we’re going to see a short-term downward correction headed into a long-term bull market.
For those of us looking at small caps, we’re mostly waiting on news, earnings, or rate cuts. If January and February are filled with these slightly down weeks there are going to be plenty of buy opportunities. We’re a week out from the start of Earnings Season and most eyes will be on the big names. Underwhelming earnings reports could see the market look for value in smaller growth stocks, but that trend would take a few weeks to materialize. For this week, I’m looking to hold the course.
Clint’s Outlook
Good Monday morning for anyone not an NFL coach with a losing record. This week I am curious to see if the market is ready to move forward in 2024 or continue to make corrections from the close of last year. The inverse trading of Tech and Healthcare may continue with a steady flow of news from companies coming out of the JP Morgan Healthcare Conference. This week’s earnings should help give some focus on the year ahead. I am interested in hearing from Taiwan Semiconductor Manufacturing (TSM) as a gauge for what to expect from all chip makers as well as how the big banks fare come the end of the week. Credit delinquency rise and the consumer being over extended will probably pop up more than a few times in those calls.
Reports of Note
Thursday
CPI
Core CPI
Friday
PPI
Core PPI
Ledger Island This Week:
In Spotlight we will be going international looking at both United Kingdom based Genius Sports Ltd (GENI) and Chinese EV automaker Nio Inc. (NIO).
This week’s How Tuesday we will be talking about watchlists, and how we break them down here in Rank & File.
And in case you missed it…
Last week we discussed clinical-stage biotech company Ensysce Biosciences, Inc. (ENSC) and online personal finance company SoFi Technologies, Inc. (SOFI). We also updated our guidance on autonomous trucking tech company Aurora Innovation Inc. (AUR) we profiled back on 20DEC23.
Be sure to check out the Ledger Island Watchlists for updates on all the companies that we’ve profiled in our Spotlights.
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