China and America, a Tale of Two Markets – Traders Market Weekly

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    January M2 Money Supply 2.4% yr/yr (expected 2.2%; last 2.3%)


    Major European indices are looking for a modestly higher finish to the week.
    STOXX Europe 600: UNCH (+0.3% week-to-date),
    Germany’s DAX: +0.1% (+0.3% week-to-date),
    U.K.’s FTSE 100: +0.1% (-0.2% week-to-date),
    France’s CAC 40: -0.2% (+0.8% week-to-date),
    Italy’s FTSE MIB: +0.2% (+1.4% week-to-date),
    Spain’s IBEX 35: +0.1% (-1.5% week-to-date).


    January CPI 0.2% m/m, as expected (last 0.1%); 2.9% yr/yr, as expected (last 3.7%)

    European Central Bank policymaker Kazaks said he is not as optimistic as the market for a rate cut in the spring while policymaker Holzmann cautioned that there is a possibility for no cuts in 2024.


    December Industrial Production 1.1% m/m (expected 0.8%; last -1.3%); -2.1% yr/yr (last -2.9%)


    Bank of England policymaker Haskel also pushed back against rate cut expectations, saying that more evidence is needed that inflation is being reduced.


    PepsiCo (PEP 171.75, -2.10, -1.2%): beats by $0.06, misses on revs; provides FY24 guidance; announces 7% dividend increase
    Motorola Solutions (MSI 315.80, -12.55, -3.8%): beats by $0.27, beats on revs; guides Q1 EPS above consensus, revs above consensus; guides FY24 EPS in-line, revs above consensus; $2 bln increase to share repurchase authorization
    Dexcom (DXCM 125.01, -2.04, -1.6%): beats by $0.07, beats on revs; guides FY24 revs in-line
    Pinterest (PINS 37.20, -3.52, -8.6%): beats by $0.01, misses on revs; guides Q1 revs in-line; Announces third-party ad integration with Google (GOOG); focusing on monetizing international markets by enabling ads to be served on Pinterest via Google’s Ad Manager
    Expedia Group (EXPE 135.29, -24.18, -15.2%): beats by $0.05, reports revs in-line; announces the appointment of Ariane Gorin as Expedia Group’s CEO, effective as of May 13, 2024; Expects healthy travel demand in FY24 but warns growth rates across the world will decelerate; sees Q1 revenue growth below consensus; expects FY24 revenue growth in-line with the +10% in FY23, ahead of consensus
    Affirm (AFRM 45.57, -3.65, -7.4%): beats by $0.18, beats on revs; guides Q3 revs above consensus
    Cloudflare (NET 114.00, +23.69, +26.2%): beats by $0.03, beats on revs; guides Q1 EPS above consensus, revs in-line; guides FY24 EPS above consensus, revs in-line
    Take-Two (TTWO 156.87, -12.73, -7.5%): beats by $0.18, reports revs in-line; guides Q4 EPS below consensus, revs below consensus (BILL 73.69, -2.06, -2.7%): beats by $0.23, beats on revs; guides Q3 EPS above consensus, revs in-line; raises FY24 EPS, revs guidance
    Mohawk (MHK 109.79, +0.18, +0.2%): beats by $0.10, beats on revs; guides Q1 EPS below consensus
    Illumina (ILMN 138.80, -4.53, -3.2%): beats by $0.13, beats on revs; guides FY24 revs in-line; aims to finalize GRAIL divestiture by end of Q2
    Capri Holdings (CPRI 46.65, -0.89, -1.9%): misses by $0.53, misses on revs; does not intend to provide financial guidance


    More consolidation in the building space:

    Owens Corning (OC) will acquire all outstanding shares of Masonite International (DOOR) for $133.00/share in cash

    $MSI 129.79 ▲ +33.18 (+34.34%) today
    $OC 147.78 ▼ -11.71 (-7.34%) today


    US benchmark CPI revisions: December CPI revised to +0.2% from +0.3%

    Dec CPI ex-food and energy unrevised at +0.3%
    November +0.2% vs +0.1%
    October +0.1% from unchanged
    Q4 core CPI unrevised at a 3.3% annualized increase
    Core six-month annualized CPI down to 3.0% from 3.3% (this is a key metric for the Fed)

    This US dollar is initially lower on the CPI revisions, some of which is a sigh of relief that revisions weren’t higher like last year.

    Powell highlighted these changes as important ones that the Fed would be closely watching:

    One piece of data I will be watching closely is the scheduled revisions to CPI inflation due next month. Recall that a year ago, when it looked like inflation was coming down quickly, the annual update to the seasonal factors erased those gains. In mid-February, we will get the January CPI report and revisions for 2023, potentially changing the picture on inflation. My hope is that the revisions confirm the progress we have seen, but good policy is based on data and not hope.

    WSJ Fedwatcher called the US CPI revisions a ‘nothingburger, noting the minuscule changes.

    Revisions to the consumer price index released by the Labor Department Friday showed that so-called core prices—which exclude volatile food and energy items— rose 3.3% in December over the previous three months at an annualized rate. That was was unchanged from earlier figures…The six-month annualized core inflation rate was 3.2% in December, also unchanged


    Morning Market
    Dow 38672.35 -53.98 (-0.14%)
    Nasdaq 15874.12 +80.41 (0.51%)
    SP 500 5007.04 +9.13 (0.18%)
    10-yr Note -1/32 4.172
    NYSE Adv 1308 Dec 1247 Vol 100 mln
    Nasdaq Adv 2269 Dec 1603 Vol 1.3 bln

    Industry Watch
    Strong: Information Technology, Energy, Communication Services, Utilities
    Weak: Consumer Staples, Real Estate, Materials, Financials, Industrials

    Moving the Market
    — Gains in mega cap stocks supporting broader market
    — Mixed responses to earnings news since yesterday’s close
    — S&P 500 passing the 5,000 level
    — Digesting the relatively friendly annual CPI revisions

    The Vanguard Mega Cap Growth ETF (MGK) is up 0.5%. NVIDIA (NVDA 708.76, +12.14, +1.7%), (AMZN 170.83, +0.99, +0.6%), and Alphabet (GOOG 148.14, +0.92, +0.6%) are among the influential winners from the space while Meta Platforms (META 469.34, -0.56, -0.1%) underperforms, likely to due to some profit-taking activity after climbing 32.6% since the start of the year.

    The mixed disposition is partially a reflection of mixed responses to earnings news.
    PepsiCo (PEP 167.66, -6.19, -3.5%) is a standout loser after reporting quarterly results, weighing on the S&P 500 consumer staples sector (-0.8%).

    Cloudflare (NET 112.85, +22.1, +24.7%) are surging after reporting earnings.


    Dow 38,671.69 -54.64 -0.14%
    S&P 500 5,026.61 28.70 0.57%
    Nasdaq 15,990.66 196.95 1.25%
    VIX 12.96 0.17 1.33%
    Gold 2,039.20 -8.70 -0.42%
    Oil 76.49 0.27 0.35%

    even at record highs — Equity Markets may be FRAGILE 🙂


    Feb 11-17, 2024 FEAR NOT Brave Investors Where have we been and where are we going? Join our weekly market thread on Traders Community… Doing, OK? The
    [See the full post at: China and America, a Tale of Two Markets – Traders Market Weekly]

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