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- Wednesday January 3 @ 9:00am
Wednesday January 3 @ 9:00am
The rotation from tech continues as global tensions weigh on international markets
Matthew
January 03, 2024
“Whoever wishes to foresee the future must consult the past; for human events ever resemble those of preceding times.”
📈 The Markets Overnight
🌏 Asia: Down
🌍 Europe: Down a lot
🌎 US Index Futures: Down
🛢 Crude Oil: Up
💵 Dollar: Up
🧐 Yields: Up
🔮 Crypto: Down significantly
🌏 Major Global Catalysts
More disruption to global shipping as shipping line Maersk halts transit through the Red Sea and Suez Canal due to ongoing attacks. (link)
💵 Economic Reports and Events Today
Consensus forecasts shown
8:30am FOMC Member Barkin Speaks about the economic outlook at the Raleigh Chamber of Commerce. Audience questions expected. (link)
10:00am ISM Manufacturing PMI 47.2 Level of a diffusion index based on a survey of about 300 purchasing managers which asks respondents to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories. (link)
10:00am JOLTS Job Openings 8.84M Number of job openings during the reported month, excluding the farming industry. (link)
2:00pm FOMC Meeting Minutes A detailed record of the FOMC's most recent meeting, providing in-depth insights into the economic and financial conditions that influenced their vote on where to set interest rates. (link)
📰 Selected Earnings Releases
Consensus Estimates shown
After Hours Today:
CALM Cal-Maine Foods EPS 0.83 Rev 525.39M (link)
Pre-Market Tomorrow:
🔮 Selected Analyst Ratings Changes
AAPL Apple Barclays Downgrades to Underweight Lowers to 160.00
INTC Intel Stifel Maintains Hold Raises to 45.00
C Citigroup Wolfe Research Upgrades to Outperform Targets to 58.00
RKT Rocket Companies Keefe, Bruyette & Woods Downgrades to Underperform Targets to 10.75
SCHW Charles Schwab Goldman Sachs Downgrades to Neutral Targets 71.00
VZ Verizon Communications Keybanc Upgrades to Overweight Targets 45.00
📉 Stocks In Play
TSLA Telsa Down 1.5% as deliveries data shows BYD has overtaken it as the world's largest EV seller amid Telsa's rapidly diminishing Chinese market share. (link)
SOFI SoFi Technologies Down 7% on an analyst downgrade to underperform and a target as low as 6.50. (link)
ZIM ZIM Integrated Shipping Adding 3% to yesterday's gains as disruption to global shipping increases rates paid by shippers. (link)
Crypto volatility continues as rumors circulate the SEC will deny the latest round of Bicoin ETF applications. CLSK, MARA, HUT, RIOT
💬 Commentary
Last Friday's selling gained momentum yesterday as the markets reopened for the first trading day of 2024. Tech, especially the Mag 7, took the brunt of the selling with QQQ down 1.69% and XLK, the technology ETF, down 2.6%. Industrials and consumer discretionary joined tech near the bottom of the performance list, but it wasn’t all bad news as healthcare surged higher by 1.76% on a rosy long-term outlook for MRNA and strong performance from other pharma and bio-tech companies. Utilities and consumer staples also finished strongly higher, benefiting from the rotation out of tech.
Global markets were very weak overnight due to heightened Middle East tensions and disruptions to global shipping. US stocks are continuing to trade on the themes we saw yesterday, with healthcare leading and tech lagging. However, we're also seeing small caps underperform as the selling widens. We'll need to wait until shortly after the open for the first potentially market-moving catalysts of the day, with the job opening report and the manufacturing PMI. Later in the day, we'll gain insight into the Fed's thinking on the path forward for rates and monetary policy.
It promises to be another volatile day, with the selling continuing unless any of these catalysts can convince the bulls to come back in with enough strength to overwhelm sellers who clearly have control of the tape right now.
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