The major U.S. stock indexes improved on the previous week’s positive result, with the $NASDAQ(.IXIC)$ adding around 4.8%, the $S&P 500(.SPX)$ 2.7%, and the $DJIA(.DJI)$ 2.0%. The latest results mark a reversal from year-end 2022, when the$S&P 500(.SPX)$ stands on 200DMA and finished down for three weeks in a row.
A U.S. small-cap index outperformed by a wide margin, as the Russell 2000 Index $iShares Russell 2000 ETF(IWM)$ recorded a weekly return of more than 5%. The latest week’s gain marks a brief turnaround for an index that fell more than 20% in 2022, slightly worse than the declines for its large- and mid-cap peer indexes.
As of last Friday, the $Straits Times Index(STI.SI)$ gained 0.52% weekly; and$S&P/ASX 200(XJO.AU)$ gain 3.07% last week.
Sales check ahead: A report scheduled to be released on Wednesday will provide an update on U.S. retail sales activity during the holiday shopping season. The data on December sales follows a November report that recorded a 0.6% sales decrease—the biggest decline in 11 months.
Macro Markets to Watch
Inflation moderation: U.S. prices rose at a 6.5% annual rate in December as measured by the CPI, marking the smallest yoy increase since October 2021. Excluding food and energy costs, core inflation rose by 0.3% relative to the previous month, in line with economists’ average forecast.
Low expectations: A handful of major U.S. banks kicked off earnings season with mixed results. As of Friday, analysts were forecasting that Q4 earnings for companies in the $S&P 500(.SPX)$ fell by an average of 3.9%, which would mark the first yoy decline since the third quarter of 2020, according to FactSet.
Calming trend: $Cboe Volatility Index(VIX)$ that measures investors’ expectations of short-term U.S. stock market volatility fell nearly 13%, marking the second weekly decline in a row. The index is down about 45% from a recent peak in mid-October.
Gold hit 9 month High: Gold prices $Gold - main 2302(GCmain)$ firmed above the key $1,900 level on Friday, Lower interest rates and the dollar edged lower tend to be beneficial for gold, silver, metal's bullion.
Oil recovery: The price of U.S. crude oil $Light Crude Oil - main 2302(CLmain)$ climbed to around $80 per barrel on Friday to record a weekly gain of about 8%. 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.
Bitcoin rebound: The price of Bitcoin, the most widely traded cryptocurrency, surged around 15% to around $19,500—the highest level in more than two months. Nevertheless, it’s well below Bitcoin’s 2022 peak of more than $47,000 in late March.
Sectors & Stocks Performances Review
In terms of sectors, only the Consumer Defensive sector fell, and Consumer Cyclical, Technology, and Basic Materials sectors rose among the top three.
Stocks to Focus :
$Tesla Motors(TSLA)$ cut prices in its U.S. and key European markets after several quarters of weaker-than-expected sales. A week ago, the company had already cut prices in China for the second time since October 2022. That reflects Tesla's struggles after falling well short of its annual delivery target and Tesla may be forced to sacrifice profit margins.
$Wells Fargo(WFC)$ ’s Q42022 revenue was US$19.66 billion, down 5.8% y-o-y, and US$380 million less than expected. $JPMorgan Chase(JPM)$ 's Q42022 revenue and EPS exceeded expectations, and investment banking revenue fell 9% y-o-y. $Bank of America(BAC)$ 's Q42022 revenue was US$24.53 billion, an increase of 11.2% y-o-y, which was US$360 million higher than expected. $BlackRock(BLK)$ 's Q42022 revenue and earnings per share exceeded expectations, and its asset management scale fell by 14% y-o-y.
$Delta Air Lines(DAL)$ 's fiscal first-quarter earnings per share guidance came in below expectations. Mark Gurman, a well-known $Apple(AAPL)$ whistleblower reporter, said that Apple plans to introduce AR shopping functions in the Apple Store in the future. This feature allows Apple products to be displayed in AR on the iPhone side, and information such as prices and specifications can be released. Apple’s AR/VR headset is expected to launch this year, Gurman said.
Weekly Top Gainers of$S&P 500(.SPX)$
The Top 10 winners are:$United Continental(UAL)$ ,$American Airlines(AAL)$ ,$Norwegian Cruise Line(NCLH)$ ,$Royal Caribbean Cruises(RCL)$ ,$Carnival(CCL)$ ,$Amazon.com(AMZN)$ ,$NVIDIA Corp(NVDA)$ ,$ServiceNow(NOW)$ ,$Generac(GNRC)$ ,$Expedia(EXPE)$
The Week Ahead: Jan 9th-13th
Notable Earnings to Watch:
$Goldman Sachs(GS)$, $Microsoft(MSFT)$ , $New Oriental Education & Technology(EDU)$ , $United Continental(UAL)$, $Alcoa(AA)$, $Procter & Gamble(PG)$ , $TAL Education Group(TAL)$ ,$Netflix(NFLX)$ , $Schlumberger(SLB)$
Key events this Week:
Monday
- Martin Luther King Jr. birthday observed, U.S. financial markets closed
Tuesday
- No major reports scheduled
Wednesday
- Retail sales, U.S. Census Bureau
- Business inventories, U.S. Census Bureau
- Producer Price Index, U.S. Bureau of Labor Statistics
- Industrial production and capacity utilization, U.S. Federal Reserve
Thursday
- Housing starts, U.S. Census Bureau
- Weekly unemployment claims, U.S. Department of Labor
Friday
- Existing home sales, National Association of Realtors
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