- Moving the markets
The market rose today, as traders digested signs of strong economic growth and the latest earnings reports.
The U.S. economy grew by 3.3% in the fourth quarter, beating the 2% forecast and showing resilience despite Fed rate hikes. Of course, this number may change later when no one is paying attention. How can the forecast be so wrong?
The report also had good news on inflation. The personal consumption expenditures price index went up by 2.7% on an annual basis, down from 5.9% last year.
The mood soured a bit when Tesla tanked 10%. The electric car maker reported weak fourth-quarter results and warned of lower sales growth for 2024. On the bright side, IBM soared 8% after the tech giant beat earnings and revenue expectations.
Other economic data was mixed. New Home Sales increased by more than 4% in 2023, while Existing Home Sales hit a record low. National economic activity fell unexpectedly in December, and Initial Jobless Claims rose to a one-month high.
Bond yields fell, the MAG7 stocks slid along with Tesla, the dollar rose, and oddly enough, so did gold. Oil prices broke free from their range and neared November highs.
ZeroHedge pointed out that the last two weeks of February have been the worst two weeks of the year since 1928. Is this a coincidence or a curse?
2. Current “Buy” Cycles (effective 11/21/2023)
Our Trend Tracking Indexes (TTIs) have both crossed their trend lines with enough strength to trigger new “Buy” signals. That means, Tuesday, 11/21/2023, was the official date for these signals.
If you want to follow our strategy, you should first decide how much you want to invest based on your risk tolerance (percentage of allocation). Then, you should check my Thursday StatSheet and Saturday’s “ETFs on the Cutline” report for suitable ETFs to buy.
3. Trend Tracking Indexes (TTIs)
The market opened strong, but lost momentum by noon. However, investors saw the dip as a chance to buy more stocks. This boosted the market, which closed at a higher level, lifting our TTIs with it.
This is how we closed 1/25/2024:
Domestic TTI: +7.56% above its M/A (prior close +6.49%)—Buy signal effective 11/21/2023.
International TTI: +6.77% above its M/A (prior close +6.48%)—Buy signal effective 11/21/2023.
All linked charts above are courtesy of Bloomberg via ZeroHedge.
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