Marin Wealth Advisors, LLC.

Registered investment Advisor

January 28, 2024

Inflation Continues Slow Descent, Economy Buoyant – Jan 26 Market Recap

Indices

  • Dow 38,109, +246 or +0.65%.  
  • Nasdaq 15,455, +145 or +0.95%.  
  • MSCI EAFE 2222.74, +43.49 or +2.00%. 
  • S&P 4,83,0 +51 or +1.05%. 
  • USD10Y 4.16%, +1.4bp or +0.34%. 
  • WTI Crude $78.13 bbl, +4.72 or +6.43%.

Inflation Continues Slow Descent, Economy Buoyant  

It was a fairly uneventful week until Thursday’s Q4 GDP report surprised expectations and notched a very healthy growth rate of +3.0% (vs +2.0% expected). Durable Goods Orders were flat month over month, which helped to dampen any inflation fears in light of the GDP report. On Friday, the Personal Consumption Expenditure demonstrated that inflation continues to abate, albeit slowly but demonstrably. Headline PCE now sits at +2.6% and Core PCE at +2.9% vs the Fed’s 2% target.

Next Week 

It is a huge week for both economic data and earnings reports this week. Labor data points include JOLTS, ADP Private Payrolls, and January Non-Farm Payrolls. In addition, the Federal Reserve meets on Wednesday and while no change to interest rates is expected (Fed futures indicates 97% probability of no change), the language in the Fed’s statement as well as Fed Chair Powell’s response to media questions will be heavily scrutinized. On Thursday, additional manufacturing data will be released. The earnings calendar is jam packed with huge names; Alphabet, Apple, Microsoft, General Motors, Starbucks, United Parcel Service, Mastercard, Qualcomm, Chevron and Exxon Mobile.

Economic Calendar  

  • Monday – N/A. Earnings: N/A. 
  • Tuesday – December Job Openings and Labor Turnover Survey (JOLTS), January Consumer Confidence. Earnings: Alphabet (GOOG), Microsoft (MSFT), General Motors (GM), Starbucks (SBUX), and United Parcel Service (UPS). 
  • Wednesday – January ADP Private Payrolls, FOMC Interest Rate Decision. Earnings: Mastercard (MA) and Qualcomm (QCOM). 
  • Thursday – Initial Jobless Claims, January S&P and ISM Manufacturing Surveys. Earnings: Amazon (AMZN), Apple (APPL), Clorox (CLX). 
  • Friday – January Non-Farm Payrolls, January Unemployment Report, January Average Hourly Earnings. Earnings: Chevron (CVX) and Exxon Mobile (XOM). 

If you know of any friends or family members who could benefit from our services and these types of communiques during these unique times, we are accepting new clients and offer a complimentary one-hour review. 

Jan 26 Daily Trading Recap… 

Monday – Dow +138 to 38,001, Nasdaq +49 to 15,360, S&P +10 to 4,850, USD10Y -5.2bp to 4.094%. 

  • Eight of eleven S&P sectors traded higher today, led by Industrials, Real Estate, and Financials. 
  • December Leading Economic Indicators were -0.1% vs -0.3% expected and vs -0.5% last month. 
  • Earnings: United Airlines (UAL) beat both their earnings and revenue estimates but guided Q1 lower due to the Max 9 grounding. 

Tuesday – Dow -96 to 37,905, Nasdaq +65 to 15,425, S&P +14 to 4,864, USD10Y +4.8bp to 4.142%. 

  • Seven of eleven S&P sectors traded higher today, led by Consumer Staples, Communication Services, and Technology. 
  • Earnings: Netflix (NFLX) missed earnings but beat revenues and subscriber numbers; NFLX traded up 10%. Proctor and Gamble (PG) beat earnings on higher prices but missed on revenues as volumes were flat; PG traded up +4.0%. 

Wednesday – Dow -99 to 37,806, Nasdaq +56 to 15,481, S&P +4 to 4,868, USD10Y +3.6bp to 4.178%. 

  • Seven of eleven S&P sectors traded down today, led lower by Materials, Utilities, and Consumer Staples. 
  • January S&P Flash Manufacturing PMI improved markedly to 50.3 vs 47.2 expected and vs 47.9 last month. 
  • January S&P Flash Services PMI was 52.9 vs 51.2 and vs last month’s 51.4 print. 
  • Earnings: Tesla (TSLA) missed their earnings and revenues estimates and warned of lower volume growth in 2024; TSLA traded down -6% post close. 

Thursday – Dow +202 to 37,468, Nasdaq +200 to 15,055, S&P +41 to 4,780, USD10Y +11.4bp to 4.144%. 

  • Nine of eleven S&P sectors traded higher today, led by Energy, Communication Services, and Utilities. 
  • Jobless claims were 214,000, vs 200,000 forecast and vs. last week’s slightly revised higher print of 189,000 (originally 187,000). 
  • Q4 2023 Preliminary GDP easily beat estimates at +3.0% vs +2.0% and vs Q3’s +4.9% print. 
  • December Durable Goods Orders were flat vs +1.5% expected and vs +5.5% last month. 
  • Earnings: Intel (INTC) beat both their revenue and earnings estimates but guided Q1 lower; INTC traded down -10.09% in the extended session. American Airlines (AAL) beat top and bottom-line estimates and traded up +10%.  

Friday – Dow +60 to 38,109, Nasdaq -55 to 15,455, S&P -3 to 4,890, USD10Y +2.8bp to 4.16%. 

  • Seven of eleven S&P sectors traded higher, led by Energy, Healthcare, and Consumer Discretionary. 
  • The December Personal Consumption Expenditure (PCE) Headline number was +0.2%, in line with expectations. Year-over-year PCE was unchanged at +2.6%. 
  • The December Core PCE number was also +0.2% which reduced the year-over-year Core PCE number to +2.9% vs +3.2% in November. 
  • Earnings: Colgate-Palmolive (CL) beat earnings and revenue estimates on higher prices and traded up nearly +2%. American Express (AXP) missed their Q4 numbers but guided Q1 earnings higher and traded up +7%. 

If you know of any friends or family members who could benefit from our services and these types of communiques during these unique times, we are accepting new clients and offer a complimentary one-hour review. 

Disclaimer: This is not a recommendation to buy or sell any of the securities listed above. I personally, or a family member whose account I control, have positions in the following securities/assets…Bitcoin, Cardano, Chainlink, Ethereum, BITB, ETHE, GBTC, GM, RIVN, TOST, and TSLA.