26%
Juniper Networks (JNPR): Hewlett Packard Enterprise agreed to buy the networking company for $14 billion in cash.
Big Movers in January 2024
24%
Nvidia (NVDA): The semiconductor giant broke out to new highs on demand for AI chips, including specialized products for China.
16%
Netflix (NFLX): The streaming-video giant added more subscribers than expected as its new ad-based service gains traction.
25%
Tesla (TSLA): The EV maker missed estimates and projected “notably lower” growth amid weaker pricing and increased competition.
23%
Archer Daniels Midland (ADM): The food processor placed its CFO on administrative leave and delayed announcing results as it reviews accounting practices.
23%
MarketAxess (MKTX): The bond-trading firm fell despite reporting better-than-expected earnings and revenue.
Key Economic Events Last Month
 | Job Growth, Unemployment Beat Estimates | The U.S. added 216,000 jobs in December, beating the 170,000 forecast. Unemployment was also lower than expected. (5/1) |
|---|---|---|
| Retail Sales Beat for 6th Straight Month | Retail sales increased by 0.6% overall in December and 0.4% excluding automobiles. Both readings were double consensus. It was the sixth straight month that retail sales beat estimates. (17/1) |
| Historic Rebound in Consumer Sentiment | Consumer sentiment rose more than expected to its highest level since July 2021. The index had its biggest two-month increase since 1991 as inflation worries eased. (19/1) |
| Economic Growth Beats Estimates by Wide Margin | Gross domestic product expanded 3.3% in the third quarter, well ahead of the 2% forecast. Consumer and government spending helped drive the increase. (25/1) |
Key Futures Contracts
| Product Name | Current Month | Expiration | Next Month | 1-Mon% |
|---|---|---|---|---|
| S&P 500 E-Mini (@ES) | ESH24 (Mar) | 15 Mar 24 | ESM24 (Jun) | +1.1% |
| *S&P 500 E-Mini Micro (@MES) | MESH24 (Mar) | 15 Mar 24 | MESM24 (Jun) | +1.1% |
| Nasdaq-100 E-Mini (@NQ) | NQH24 (Mar) | 15 Mar 24 | NQM24 (Jun) | +1.3% |
| *Nasdaq-100 E-Mini Micro (@MNQ) | MNQH24 (Mar) | 15 Mar 24 | MNQM24 (Jun) | +1.3% |
| Dow Jones E-Mini (@YM) | YMH24 (Mar) | 15 Mar 24 | YMM24 (Jun) | +0.7% |
| Dow Jones E-Mini (@MYM) | MYMH24 (Mar) | 15 Mar 24 | MYMM24 (Jun) | +0.7% |
* Micro contracts are one-tenth the size of standard e-minis.
Events to Watch This Month
| Date | Event | What to watch |
|---|---|---|
| Fri, 2-Feb | Employment report | Job-market conditions: unemployment, wages, hours worked. |
| Tue, 13-Feb | Consumer price index (CPI) | Inflation trends |
| Thu, 15-Feb | Retail sales | Will sales beat estimates for a seventh straight month? |
| Fri, 16-Feb | Housing starts & building permits | Will homebuilding rebound in the face of a housing shortage? |
| Wed, 21-Feb | Fed minutes | Guidance on balance sheet reduction, next meeting on 31 March |
Sector Watch
Communications5%
Financials3%
Health Care3%
Technology3%
S&P 5002%
Consumer Staples1%
Energy0%
Industrials1%
Utilities3%
Materials4%
Consumer Discretionary4%
Real Estate5%
Communication stocks outperformed, thanks to optimism about stronger fundamentals in Netflix and Meta Platforms.
Financials gained on strong results at insurance companies and cost cuts at Citi.
Consumer discretionary stocks were dragged lower by Tesla, Etsy and VF.
Real estate fell as strong economic reports reduced the odds of quick interest-rate cuts.
Noteworthy Calls & Predictions
12-January
Market strategists raised their targets for the S&P 500, expecting that lower inflation will reduce interest rates. Wells Fargo hiked its estimate from 4,800 to 5,000 (10/1). UBS is looking for a move to 5,150 versus its earlier projection of 4,850 (16/1).
S&P 500
12-January
Inflation might get stuck at 3 percent, according to Mohamed El-Erian of Allianz. He cited higher shipping costs because of Red Sea disruptions, a tight labor market and less chance of goods prices falling. El-Erian thinks the Federal Reserve will wait until the summer before lowering interest rates.
Inflation
25-January
Auto-lending data suggests older buyers are losing interest in electric vehicles, according to Bank of America. Hybrid vehicles were expected to benefit from the trend, which is associated with costs and limited EV range. Bank of America now anticipates lower uptake of EVs and market share through the end of the decade.
EV demand
25-January
Payroll growth could slow to under 50,000 jobs per month by mid-2024, JPMorgan economist Michael Feroli forecast. That would lift the unemployment rate above 4% and let the Fed cut interest rates in June. He said strong inventory growth in the fourth quarter will reduce demand in the current quarter. (1/25).
U.S. employment
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
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