Shesa's Weekly Update -1|21|24

On Friday, the S&P 500 gained 1.23% to 4,839.81, breaking its previous record close from January 2022. The Dow Jones was up 395 points, or 1.05%, to close at 37,863.80. Both S&P 500 and DOW have hit all-time high. The Nasdaq 100 also closed all-time high. The Nasdaq composite Index was up 1.70% to 15,310.97, 7% away from hitting all-time high. If the big tech earnings goes well then we can anticipate Nasdaq to hit new all-time high. 

Retail Sales: The consumer went wild this holiday season. Retail sales in December was up 0.6% vs. 0.4% in November. Core retail sales (excluding autos and gas) also rose 0.6% month-over-month, which is double the consensus expectation for a 0.3% rise. On a year-over-year basis, retail sales growth accelerated from 4% in November to 5.6% in December. The consumers have been persistent on their spending and keeping U.S economy growth intact. 

Chip sector was on fire last week after Taiwan Semiconductor (TSM) - the world’s largest contract chip manufacturer came with solid earnings and projected for better time ahead. 

Mortgage applications jumped by more than 10% in this past week to their highest level since July 2023 as the average 30-year mortgage rate dropped from 6.81% to 6.75%.

Unemployment: Initial filings for unemployment insurance came at 187,000 for the week ended Jan. 13, the lowest level since Sept. 24, 2022. 

Government Shutdown: Congress avoided the shutdown last Thursday and passed a temporary measure that will run to March 1 for some federal agencies. Their funds were set to run out Friday. It extends the remainder of government operations to March 8.

Major Technology companies Q4 Earnings: This week we will see two huge Earnings.
Tuesday, 1/23:  Netflix (NFLX)
Wednesday, 1/24: Tesla (TSLA)

These two earnings will set the tone. Tesla stock has been hit recently despite the stock indexes have soared. If it comes with reasonable earnings and no major negative news then we may see short covering of the stock. This is the only company in magnificent seven which has not done well so far this year.  But believe on this company. We will see how the earnings goes..

Key Economic data  this week
THU, 1/25: Q4 GDP, New Home Sales: Economists are expecting GDP growth of 1.7%. 
FRI, 1/26:   Core PCE/Personal Income/Spending.

Wall Street is expecting that FED will start cutting rate from March 2024 but I do not buy this thesis. 

Stock yo watch this week: TSLA, NFLX, NVDA, MSFT.

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