To The Moon

Summary.

A new week, a new Chinese New Year beginning.

Last week’s major events:

• On Fri, 09 Feb 2024, the S&P 500 index closed above the 5,000 mark for the first time in its history.

• Fed officials’ commentaries - largely reiterating their stances that more confidence in inflation's path downward is needed before they will cut interest.

• Corporates quarterly earnings have come in better than expected. eg. $ARM Holdings Ltd(ARM)$ , $Palantir Technologies Inc.(PLTR)$ etc.. (see below - Top 5 gainers)

Overall, a fairly positive sentiments (if you asked me) where the 3 Composite indexes closed with varying degrees of “highs”, compared to the week before.

Earning season so far.

Broadly earnings have been coming in increasingly positive.

With 75% of S&P 500 companies having reported earnings, the benchmark index is on pace to report its 2nd straight quarter of earnings growth.

Analysts see earnings growth continuing throughout the next two years.

Week of February, 12 - 16.

For coming week, I believe listed US companies’ quarterly earnings will continue to take centrestage.

Approximately 15% of the S&P 500 is set to report their earnings, this week.

Wall Street would be hawking over the followings (?):

• Cadence Design Sys Inc (CDNS) - Mon, 12 Feb.

• $Coca-Cola(KO)$ - Tue, 13 Feb.

• Shopify Inc. (SHOP) - Tue, 13 Feb.

• Airbnb (ABNB) - Tue, 13 Feb.

• Cisco Systems, Inc. (CSCO) - Wed, 14 Feb.

• Occidental Petroleum (OXY) - Wed, 14 Feb.

• The Kraft Heinz Company (KHC) - Wed, 14 Feb.

• Stellantis N.V. (STLA) - Thu, 14 Feb.

• Coinbase Global, Inc () - Thu, 14 Feb.

Before you decide to enter the market, remember to watch out for the US Consumer Price index (CPI) report for January 2024, coming out on Tue, 13 Feb 2024 morning.

The first inflation report, in a “new” year will definitely “exert” its reach and influence over the market, data dependent (of course!).

Recap - December 2023 CPI.

Wall Street expectations.

For CPI estimates.

• Wall Street expects an annual gain of 2.9% for headline CPI (includes the price of food & energy).

• This will be a noted -0.5% decrease from December 2023’s CPI of 3.4%.

• On month-over-month basis, prices are set to rise 0.2%, in line with December's rise.

For Core CPI estimates,

• Stripped of food & energy prices, inflation is expected to rise by 3.7% YoY.

• This will be a slowdown of -0.2% from December 2023’s CPI of 3.9%.

• Monthly core price increases are expected to clock in at 0.3%, unchanged from December’s data.

If the forecasted estimates hold true, it will be the lowest annual inflation rate in about 3 years. It will also be the first time that number will come in below 3% since March 2021.

Supporting evidences:

(1) December PCE.

To “assess” the accuracy of Wall Street's inflation forecasts, could compare them to the most recent official data, core PCE for December 2023, published on 26 Jan, 2024. (see below)

• December PCE came in at 2.9%, -0.1% lower than analysts’ expectations (3.0%).

• This was also -0.3% lower than revised November’s PCE (3.2%).

(2) Analysts’ assessment.

Morgan Stanley economist Diego Anzoategui.

• Expects more core goods deflation this month.

• This is driven mainly by weak used car prices.

• Gradual deceleration is confirmed.

• Progress to curb services-inflation has been limited.

• While rent increases are moderating, insurance and hotel prices are taking an upward turn.

• There is a lot of optimism in the media, that should be “good” news to retail investors like us.

• Looking at above evidence. is it too early to predict that a rally might be in the running? Personally, I do not think so.

• Hopefully, the optimism will enable all Cathie Wood previous recommendations recover, so that I could get rid of the mis-recommendations. Hee hee.

• Remember, what Wall Street wants, Wall Street gets. Just try not get caught up in their games, stay level headed.

Must Read: Click on below titles to access. Give a like & help to repost ok. Thanks.

• Revised CPI: Will Fed sways on Interest Cuts ?

• $ARM yourself for Long-Term gains, Now ?

• ARKK's Cathie Wood: Investors' nightmare & Wealth destroyer ?

• Do you think January 2024 CPI will be lower than December’s inflation data?

• Do you think the optimism fanned by Wall Street is sustainable?

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