"..election years are weak historically during Q1...Lows tend to coincide with March."
Posted 16 January 2024 - 05:48 AM
Economics: Final German CPI, German ZEW survey, UK unemployment, Empire manufacturing survey
Earnings: Hugo Boss, Goldman Sachs, Morgan Stanley
Speeches: Fed's Waller, BoE's Bailey and Germany's Halbeck
Posted 16 January 2024 - 05:51 AM
Dumb Money Confidence has retreated quickly from a historically high extreme
The shift in sentiment has taken only a week, one of the quickest shifts in 25 years
Rapidly declining sentiment has most often preceded further short-term declines, but longer-term gains
Trend-following traders are pulling back their expectations...quickly
As November came to an end, we looked at some signs that sentiment was becoming overheated. Among the most prominent examples was Dumb Money Confidence, which surged to nearly 90%, one of the most extreme levels since we began computing this in 1998.
The few other times when trend-following traders got this confident, stocks struggled, except for the abnormal trend in 2021. In 2010, the S&P 500 peaked almost immediately after and fell into a multi-month pullback."
Posted 17 January 2024 - 07:41 AM
U.S. futures fell early Wednesday alongside global stocks, as investors reacted to fresh pushback from central bankers over near-term rate cuts. And Chinese shares sank to the lowest in nearly five years after a raft of weak economic data.
Regional bank earnings are in the spotlight later, while the December retail sales report is due at 8:30 a.m"
Posted 17 January 2024 - 07:42 AM
World markets seemed to have returned this week to the 'glass half empty' view of 2024 that they started the year with - irked by edgy inflation updates, obstinate central bankers, a mixed start to the earnings season and worrying pockets of economic weakness.
Still murky geopolitical developments in the Red Sea and elsewhere and what that may mean for shipping and goods prices, the onset of U.S. election year and congressional budgetary wrangling have also helped sap bond and stock markets."
Posted 17 January 2024 - 07:43 AM
Key developments that should provide more direction to U.S. markets later on Wednesday:
U.S. Corporate earnings: US Bancorp, Citizens Financial, Charles Schwab, Discover Financial, Kinder Morgan, Prologis
U.S. Dec retail sales, industrial production, import and export prices. U.S. Jan NAHB housing market index, Canada Dec producer price index
Federal Reserve issues Beige Book on economic conditions
Federal Reserve Board Governor Michelle Bowman, New York Fed President John Williams and Fed Vice Chair for Supervision Michael Barr all speak
World Economic Forum in Davos, European Central Bank chief Christine Lagarde speaks
U.S. Treasury auctions 20-year bonds
Posted 17 January 2024 - 08:24 AM
"3 Reasons to Be Bearish Stocks"
We've seen such a strong negative correlation between most stocks and the US Dollar Index.
We said coming into the year that if the Dollar Index was above 102, that wouldn't be the greatest environment for stock bulls.
I would take that one step further and argue that if the Dollar Index is above 102.50 then sellers of stocks are likely the ones being rewarded the most.
And finally, here are two major indexes that we pointed to coming into 2024 that would be a good indicator of risk appetite vs risk aversion.
Both of these indexes were near critical levels: Nasdaq100 near 400 and Russell2000 near 200.
If either of these are below those key resistance levels, that poses a problem.
Maybe only a temporary problem, but a problem with the uptrend nonetheless
If these indexes are above those former highs, that would be constructive for the overall market.
If the Dollar is rolling over and holding below 102, that would be a favorable position for equities
And if Consumer Staples are underperforming, that would be consistent with a healthy market environment, and what we've gotten accustomed to seeing over the past year, during this historic bull market.
Otherwise, stocks are likely off to a sloppy start for Q1."