56%
Warner Bros. Discovery (WBD): Investors and analysts saw turnaround potential after the media company lost more than half its value in 2022.
Big Movers in January 2023
41%
Tesla (TSLA): The electric-car maker rebounded from its biggest monthly drop ever after reporting strong orders and saying production could reach 2 million units this year.
39%
Western Digital (WDC): The data-storage company rose on reports of a potential merger. It additionally benefited from strong results at rival Seagate Technology (STX).
18%
Northrop Grumman (NOC): Expectations of reduced government spending weighed on the defense contractor.
16%
Enphase Energy (ENPH): Investors took profits in the solar-energy stock after a 45% rally last year. There were also uncertainties about the strength of residential demand.
14%
NRG Energy (NRG): The drug maker fell as investors shunned health-care stocks and looked for Covid products to weaken.
Key Economic Events Last Month
 | Jobs report shows potential for soft landing | Job growth was higher than expected in December and unemployment was lower than projected. Wages still rose less than feared, which suggests inflation may be cooling without a recession. (6/1) |
|---|---|---|
| Housing at a crossroads? | December’s consumer price index (CPI) fell 0.1%, versus estimates for an unchanged reading. It was the third straight month below estimates and the biggest drop since August 2020. (12/1) |
| Consumers brighter as prices ease | January’s consumer sentiment index rose more than expected to a nine-month high. Assessments of the labor market and inflation expectations improved. (13/1) |
 | GDP Strong Amid Signs of Weakening | Gross domestic product rose 2.9% in the fourth quarter, beating the 2.6% forecast. Some economists said higher inventories and lower consumer spending may indicate a slowdown. (26/1) |
Key Futures Contracts
| Product Name | Current Month | Expiration | Next Month | 1-Mon% |
|---|---|---|---|---|
| S&P 500 E-Mini (@ES) | ESH23(March) | 17 Mar 23 | ESH23(June) | +5.9% |
| *S&P 500 E-Mini Micro (@MES) | MESH23 (March) | 17 Mar 23 | MESH23 (June) | +5.9% |
| Nasdaq-100 E-Mini (@NQ) | NQH23 (March) | 17 Mar 23 | NQH23 (June) | +10% |
| *Nasdaq-100 E-Mini Micro (@MNQ) | MNQH23 (March) | 17 Mar 23 | MNQH23 (June) | +10% |
| Dow Jones E-Mini (@YM) | YMH23 (March) | 17 Mar 23 | YMH23 (June) | +2.6% |
| Dow Jones E-Mini (@MYM) | MYMH23 (March) | 17 Mar 23 | MYMM23 (June) | +2.6% |
* Micro contracts are one-tenth the size of standard e-minis.
Events to Watch This Month
| Date | Event | What to watch |
|---|---|---|
| Wed, 1-Feb | Federal Reserve meeting & press conference | Rates are expected to rise 25 basis points. What will Jerome Powell signal about future policy? |
| Fri, 3-Feb | Non-farm payrolls | Will unemployment and wage growth give the Fed reason to pause rate hikes? |
| Tue, 14-Feb | Inflation report | The consumer price index one hour before U.S. markets open could shape rate expectations. |
| Wed, 15-Feb | Retail sales, housing index | Separate reports show retail sales growth in January and homebuilder sentiment in February. |
| Wed, 22-Feb | Fed minutes | Separate reports show retail sales growth in January and homebuilder sentiment in February. |
Sector Watch
Consumer Discretionary15%
Communications15%
Real Estate10%
Technology8%
Materials9%
Financials7%
S&P 5006%
Industrials4%
Energy3%
Consumer Staples1%
Health Care2%
Utilities1%
Consumer discretionaries rebounded as investors returned to growth stocks like Tesla and travel companies like Carnival.
Communication stocks rallied as investors value-hunted traditional media stocks and Netflix’s subscriber growth surprised to the upside.
Noteworthy Calls & Predictions
06-January
Apollo Global Management Chief Economist Torsten Slok thinks a soft landing is underway. He cited declining inflation and continued strength in the labor market. The result could be profits declining less than feared, potentially lifting stocks.
Stocks
07-January
Bloomberg reports that strategists are getting more optimistic. The article quoted David Kelly of JPMorgan Asset Management and Ed Yardeni of Yardeni Research, who see rate hikes ending as inflation slows. They also cited extreme levels of pessimism.
Stocks
09-January
Professor Campbell Harvey, who discovered the link between the yield curve and recessions, said the indicator could be wrong now. “All models are simplifications of reality,” he said, noting other data don’t confirm a hard landing. He added the Fed could trigger a recession by continuing to “overshoot” with rate hikes.
Economy
11-January
The PC market could improve in late 2023, Reuters reported, citing IDC and Canalys. The researchers cited businesses upgrades and the looming end of Windows 10 support. PC makers and semiconductor companies could potentially benefit, they said.
Technology
19-January
Stocks may climb despite lower earnings, said LPL Chief Equity Strategy Jeffrey Buchbinder. He noted that indexes typically drop before profits decline because the market is forward looking. The same can be true as prices bottom, Buchbinder said, forecasting a “solidly positive year.”
Stocks
Disclosure
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