The $S&P 500(.SPX)$ and the $DJIA(.DJI)$ sustained their first negative week of 2023 amid mixed earnings results, big layoff announcements from major technology companies, and concern about the prospect of a recession. The $DJIA(.DJI)$’s weekly drop of 2.7% was far steeper than the 0.6% decline for the$S&P 500(.SPX)$ ; in contrast, the $NASDAQ(.IXIC)$ finished up 0.6%.
For the second week in a row, a U.S. large-cap growth stock benchmark outperformed its value counterpart by a wide margin, reversing the trend from 2022, when the value equity style dominated. Over the past two weeks, the growth benchmark gained 4.4% while its value counterpart added 0.3%.
As of last Friday, the $Straits Times Index(STI.SI)$ 's weekly volatility is zero ; and$S&P/ASX 200(XJO.AU)$ gain 1.69% last week.Welcome to Read:
Weekly Winners | Why Did TOP GLOVE Lead The Market? ; Weekly| They Performed Well in Earnings Season- PLS, TLX & FPH
Technically, the $S&P 500(.SPX)$ still under the challenge of 200DMA and saw many pressure from 4,000 points area.
Weekly chart
Citi analysts once pointed out in a research report on January 13,
the historical price-to-earnings ratio of the $S&P 500(.SPX)$ has returned to 18.2 times, almost touching the high end of what we think is a reasonable valuation range. Currently we are comfortable with forecasts that the $S&P 500(.SPX)$ will trade in the 3,700-4,000 range. Given such valuation levels, we suspect that the upside momentum in equities may be limited in the near term.
“Previous research suggests that the median trough and peak of a bear market rally could be between 13-18%, which could bring the S&P 500 back to the 4000-4200 range.”
Sectors & Stocks Performances Review
In terms of sectors, the Communication Services sector in $S&P 500(.SPX)$ see best performance by 4.05% rise. The utilities sector see worst performance mer Defensive sector fell, and Consumer Cyclical, Technology, and Basic Materials sectors rose among the top three.
For the second week in a row, a U.S. large-cap growth stock benchmark outperformed its value counterpart by a wide margin, reversing the trend from 2022. We can see $Apple(AAPL)$ ,$Microsoft(MSFT)$ ,$Alphabet(GOOG)$ ,$Tesla Motors(TSLA)$ see different gains.
Weekly Top Gainers of$S&P 500(.SPX)$
The Top 10 winners are: $SVB Financial Group(SIVB)$ , $ResMed(RMD)$ , $Match(MTCH)$ , $NVIDIA Corp(NVDA)$ , $Alphabet(GOOG)$ , $Expedia(EXPE)$ , $Tesla Motors(TSLA)$ ,$Alphabet(GOOGL)$ , $ServiceNow(NOW)$ ,$First Republic Bank(FRC)$
Data from Tiger Brokers
Macro Markets to Watch
Debt ceiling showdown: Partisan brinkmanship in Washington D.C. over the nation’s debt ceiling aggravated the sense of anxiety for investors. Democratic and Republican leaders remained at odds over fiscal issues, and the U.S. Department of the Treasury on Thursday began taking special accounting measures to meet debt obligations and prevent a potential default—at least for now.
Inversion record: By one measure, the inversion of the yield curve for U.S. government debt recorded its biggest gap on record. As of Friday, the yield of the 10-year U.S. Treasury bond was around 3.48% compared with 4.66% for the 3-month bill—a negative spread of 118 basis points. Prior to this year, a negative spread had never been more than 100 points, according to U.S. Federal Reserve data going back to 1982.
Retail setback: The final month of the holiday shopping season didn’t provide a catalyst for the broader U.S. economy, as retail spending in December fell at a worse-than-expected pace of 1.1%. That result slightly lagged November’s 1.0% decline and was the worst monthly result of 2022 on a seasonally adjusted basis.
Earnings anxiety: Entering the peak of earnings season, analysts have been scaling back their forecasts for results from the first half of 2023. In recent weeks, earnings expectations for this year’s first and second quarters switched from year-over-year growth to declines for companies in the $S&P 500(.SPX)$ according to FactSet. For the fourth-quarter 2022 results being released in the current earnings season, analysts expected a decline of around 4.6% as of Friday.
Gold prices $Gold - main 2302(GCmain)$ closed above the key $1,900 level, Lower interest rates and the dollar edged lower tend to be beneficial for gold, silver, metal's bullion. The price of U.S. crude oil $Light Crude Oil - main 2302(CLmain)$ climbed to around $81 per barrel on Friday The latest rise was driven in part by an improved demand outlook owing to moderating U.S. inflation and China’s easing of COVID-19 restrictions.
The Week Ahead: Jan 23rd-27th
Notable Earnings to Watch:
$Johnson & Johnson(JNJ)$ ,$3M(MMM)$ ,$Verizon(VZ)$ ,$General Electric Co(GE)$ ,$Halliburton(HAL)$ ,$Lockheed Martin(LMT)$ ,$Microsoft(MSFT)$ ,$Boeing(BA)$ ,$ASML Holding NV(ASML)$ ,$Tesla Motors(TSLA)$ ,$ServiceNow(NOW)$ ,$MasterCard(MA)$ ,$American Airlines(AAL)$ ,$Visa(V)$ , $Intel(INTC)$ ,$Chevron(CVX)$
Key events this Week:
Q4 GDP ahead: Thursday’s scheduled release of the government’s initial estimate of fourth-quarter GDP is expected to show that the economy recorded its second consecutive quarter of positive growth, indicating a recovery from the negative results recorded in early 2022. In the third quarter, GDP rose at an annual rate of 3.2%; for the fourth quarter, most economists expect a modest slowdown from that growth rate.
Monday
- The Conference Board Leading Economic Index for the U.S.
- S&P/Case-Shiller 20-City Composite Home Price Index
Tuesday
- No major reports scheduled
Wednesday
- No major reports scheduled
Thursday
- Fourth-quarter GDP, advance estimate, U.S. Bureau of Economic Analysis
- Weekly unemployment claims, U.S. Department of Labor
- Durable goods orders, U.S. Census Bureau
- New home sales, U.S. Census Bureau
Friday
- Personal Consumption Expenditures Price Index, U.S. Bureau of Economic Analysis
- University of Michigan Index of Consumer Sentiment
- Pending home sales, National Association of Realtors
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