- Morning Briefing w/ KevinD
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- Tuesday January 9 @ 9:00am
Tuesday January 9 @ 9:00am
Markets pulling back after yesterday's strong rally
Matthew
January 09, 2024
“If you bring a person off the street, give him a bunch of money with no instruction, and tell him to start trading, he will sell his winners and double up his losers. He’ll try to get a high winning percentage. Over time his account equity will hit zero.”
📈 The Markets Overnight
🌏 Asia: Up
🌍 Europe: Down
🌎 US Index Futures: Down
🛢 Crude Oil: Up strongly
💵 Dollar: Down slightly
🧐 Yields: Up a bit
🔮 Crypto: Down
🌏 Major Global Catalysts
No clear global catalysts contributing to today’s pullback.
💵 Economic Reports and Events Today
Consensus forecasts shown
All Day CES, billed at the most powerful tech conference in the world starts today and continues through the week. (link)
6:00am NFIB Small Business Index 91.9 expected, reported. Level of a composite index based on a survey of small businesses which asks respondents to rate the relative level of economic conditions including labor markets, inventories and sales, capital spending, inflation, earnings and wages, and credit markets. (link)
8:30am Trade Balance -64.9B expected, -63.2B reported. Difference in value between imported and exported goods and services during the reported month. (link)
12:00pm FOMC Member Barr participates in a fireside chat about bank regulation at an event hosted by Women in Housing and Finance, in Washington DC. (link)
📰 Selected Earnings Releases
Consensus Estimates shown
After Hours Today:
Pre-Market Tomorrow:
None
🔮 Selected Analyst Ratings Changes
NFLX Netflix Citigroup Downgrades to Neutral Targets 500.00
XOM Exxon Mobil Redburn Atlantic Upgrades to Buy Raises to 119.00
CRWD CrowdStrike Holdings Morgan Stanley Upgrades to Overweight Raises to 304.00
DLO DLocal New Street Research Upgrades to Buy Targets 24.00
JBLU JetBlue Airways B of A Securities Downgrades to Underperform Lowers to 3.00
MS Morgan Stanley HSBC Downgrades to Hold Targets 96.00
PYPL PayPal Holdings Morgan Stanley Downgrades to Equal-Weight Lowers to 66.00
📉 Stocks In Play
JNPR Juniper Networks Up 25% on a WSJ report that HPE Hewlett Packard Enterprise (down 9%) is nearing a $13.5 takeover deal. (link)
U Up 3% after announcing it's cutting 1800 jobs. (link)
MTCH Match Group Up 14% on reports activist hedge fund Elliott has acquired a large stake. (link)
JBLU JetBlue Down 5% after CEO resigns and replaced by current COO. (link)
MCHP Microchip Technologies Down 3% as the company warns Q3 revenue will be lower than expected. (link)
BA Boeing Down another 1% as inspections are turning up loose bolts on the 737 MAX 9, adding to yesterday's 8% FAA grounding decline. (link)
TLRY Tilray Brands 6% on a strong earnings report. (link)
💬 Commentary
Stocks were surprisingly strong after a shaky start to the day yesterday but managed to shrug off some negative catalysts at the open and instead focused on positive catalysts from NVDA and AAPL, which led the MAG 7 and semiconductors to very strong gains, and the QQQ to a 2.07% rally. SPY and IWM weren’t far behind, with gains of 1.43% and 1.80%, respectively. Technology was the leading sector, of course, up 2.51%, followed by the communications and consumer discretionary sectors. Energy was the only sector to finish in the red on the day, down 1.16%, after recovering some of its earlier losses on a steep decline in crude oil pricing. The rally was helped by yields pulling back to very near the critical 4.00 level and a lower dollar. Clearly, it was a very strong day for stocks, with the buying continuing consistently all day with barely a pause. However, by the end of the day, the market was starting to feel overbought, with reasonable concerns that volume may be a little light for such a strong day. Fear of a rug pull today started to circulate after the close, and that’s exactly what we’re seeing in this morning’s pre-market.
Small caps are taking the brunt of the selling, with IWM down around 1.2%, while the larger cap indices are down more than 0.5%. Semis continue to outperform, with NVDA adding 1% to yesterday’s strong breakout move, but most tech is lower today, and energy has reversed its position from yesterday and is the only sector moving higher this morning. It’s too early to call yesterday's rally a dead cat bounce, but it’s certainly starting to look that way as yesterday’s weak-handed bulls exit their new long positions. We’ll need to see buy the dippers restore our confidence by finding value before this pullback gets too much deeper. Amid this uncertainty, there’s a solid list of stocks in play this morning, both on the long and short side although as usually some of these names will be excellent fades.
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