- Moving the markets
Netflix added more subscribers than ever in the fourth quarter, sending its shares up 13%. The streaming giant now has 260.8 million couch potatoes hooked on its shows. It also beat revenue and earnings forecasts, making Wall Street happy.
But not everyone was happy. Some traders were worried about the slowing economy and the risk of a downturn. They were surprised by how well the market held up, especially the S&P 500, which barely finished in the green.
Microsoft also had a good day, rising 1% and joining the $3-trillion club. It’s now one of the two most valuable companies in the world, along with Apple. Maybe they should buy each other and call it MicroApple.
The economic data this week will be important, as traders will watch the GDP and the inflation numbers. They will also keep an eye on the earnings reports from Tesla, Las Vegas Sands, and IBM, among others.
So far, most companies have beaten the low expectations, but that’s not saying much. ZeroHedge reminded us that longer supplier lead-times are bad, not good. They mean more disruptions and delays, not more demand. Remember the COVID lockdown mess? Yeah, that was bad. And it’s not over yet.
But the market ignored that and focused on the ‘strength’. That pushed the rate-cut hopes lower and the bond yields higher. The 5-year yield jumped 11bps from its low, making bond investors nervous.
Gold also lost some shine but stayed above $2k. The dollar continued to slide but not giving a boost to the precious metal.
The Mag7 stocks (Amazon, Apple, Facebook, Google, Microsoft, Netflix, and Tesla) rallied, but couldn’t keep all their gains. Crude oil broke out of its range and hit a one month high, thanks to the weaker dollar and the hopes of more stimulus.
China tried to prop up its stock market with money and rules, but it didn’t work. This chart shows how little impact it had. Maybe they should try something else, like letting the market decide.
With bond yields rising, the question is: how long can stocks keep ignoring reality? Or are they seeing something we don’t?
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 started strong, but most indexes fell by noon. Only the S&P and Nasdaq barely managed to end higher.
Our TTIs had different results. The Domestic TTI went down slightly, while the International TTI rose a bit.
This is how we closed 1/24/2024:
Domestic TTI: +6.49% above its M/A (prior close +7.04%)—Buy signal effective 11/21/2023.
International TTI: +6.48% above its M/A (prior close +6.01%)—Buy signal effective 11/21/2023.
All linked charts above are courtesy of Bloomberg via ZeroHedge.
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