January 29, 2023

The Weekend Rip: January 29, 2023

Stocks continued their rally, and bonds held firm ahead of this week’s highly-anticipated Federal Reserve meeting. Now we find out if the market’s recent optimism was warranted. 👍

Let’s recap and prep you for the week ahead. 📝

What Happened?

💚 The technology sector continues to lead the market higher. And much like the S&P 500, the Nasdaq 100 broke above what many traders called a ‘key resistance level’ this week.

🤩 This week’s Stocktwits Top 25 report showed outperformance relative to the indexes.

📝 U.S. Q4 GDP grew at 2.9%, but many of its components signal the economy might be worse than this lagging indicator lets on. Meanwhile, the Conference Board Leading Economic Indicator Index suggests a recession is ahead.

🥾 The Fed’s preferred inflation metric, Core PCE, continues decelerating. That, combined with U.S. consumer spending and wage growth moderating slightly, has the market expecting a smaller 25 bp hike at this week’s meeting.

💳 Visa and Mastercard offered muted outlooks as post-pandemic travel demand began to cool. Meanwhile, American Express crushed earnings and currently sees ‘no signs of recession.’ It appears their bet on courting wealthy Millennials and Gen Z continues to pay off.

🧑‍💼 Layoffs are beginning to spread from the tech sector, with 3M and Newell Brands announcing cuts. It’s not all bad news, though. Chipotle and Boeing announced they’re hiring thousands of workers to meet demand. And leading indicators like initial and continuing jobless claims continue to sit near historic lows.

⚡ Tesla earnings recharged shares by 33.34% this week. Elsewhere, Microsoft’s cloud business strength helped boost it and other large tech players. Intel did not fare nearly as well, reporting a dismal quarter and falling heavily.

📰 There were many other earnings reports this week, including defense stocks, semiconductors, and much more.

🪵 And finally, we discussed an under-the-radar move happening in the lumber market.

🔥 Several names were on the Stocktwits trending tab for a good portion of the week, including $GNS, $HLBZ, $MULN, $COSM, and $BOIL.

Here are the closing prices:

S&P 500	4,071	+2.47%
Nasdaq	11,622	+4.32%
Russell 2000	1,911	+2.36%
Dow Jones	33,978	+1.81%

Bullets

Bullets From The Weekend

🚗 Carmakers struggle to fit auto dealers into their EV plans. Traditional automakers are taking different approaches to incorporate their dealers as they make the longer-term transition to electric vehicles. Ford and General Motors have asked dealers to opt into the investment-heavy upgrades to their car lots, while others like Honda are moving more vehicle sales online in an attempt to compete with Tesla. Competing with Tesla and electric-vehicle-only automakers will remain an issue as these companies attempt to juggle their internal combustion engine and electric vehicle priorities. CNBC has more.

🌌 This company just raised money to become the leader in space tugboats. Atomos Space closed a $16.2 million Series A round, allowing it to complete its demonstration mission and show off its docking and towing capabilities. Its Orbital Transfer Vehicles (OTV) make it possible to reposition satellites in space. Their thesis is that if they can move flying objects into different orbits, then the cost of building satellites should decrease significantly because they don’t need full navigation capabilities. The company has an uphill battle educating the market on this idea, but it hopes a successful demonstration could send its business prospects ‘to the moon.’ More from TechCrunch.

✒️ A lawsuit alleges new AI tools rely on ‘software privacy on an unprecedented scale.’ Programmer and lawyer Matthew Butterick is taking aim at Microsoft, GitHub, and OpenAI in a class action lawsuit that alleges their tools rely on software piracy. The suit came about in November when an AI-powered tool, CoPilot, was trained on publicly available code from GitHub, raising concerns over whether that practice violates copyright laws. The suit expanded to target Microsoft and OpenAI, who are asking the judge to dismiss the claims entirely. The Verge has more.

The Brief

Need a concise summary of what’s going on this week? Look no further. Here’s an overview of important earnings and economic data for the trading week ahead.

Economic Calendar

It’s another busy week on the economic data front, but Wednesday’s Fed rate decision and the employment data in the back half of the week are key. In addition to the above, check out this week’s complete list of economic releases.

Earnings This Week

Earnings season is beginning to ramp up, with 357 companies reporting this week. Some tickers you may recognize are $AAPL, $AMZN, $GOOGL, $META, $QCOM, $PTON, $SPOT, $SNAP, $AMD, $SOFI, $PENN, $SBUX, and a lot more.