Big Benchmarks Slip as Dow and Nasdaq Post Weekly Decline
The first week of the new year saw the big benchmarks, the Dow and Nasdaq, experiencing their first weekly decline since October. The Dow took a minor hit, trimming less than 1%, while the Nasdaq faced a more significant setback of 3%. Among the industries that were hit hardest were solar stocks and auto retailers, while the chip sector also faltered. However, the pharmaceutical industry had a good week, with Merck leading the Dow with a 7% gain, while Intel tumbled 6%.
Key Events to Watch: Health Care Conference and CES Show
As we head into the second week of the year, investors should keep an eye on two key events that could stir up market news. The annual health care conference hosted by JP Morgan is set to take place, bringing together major players in the industry. Additionally, the CES electronics show in Las Vegas will showcase the latest in consumer technology. These events have the potential to impact the market and provide insight into emerging trends and opportunities.
Stocks to Watch: Finding Strength in a Struggling Market
With the stock market facing some challenges at the start of 2024, investors should be on the lookout for stocks that are showing relative strength and holding key levels. Spotify, Nvidia, Novo Nordisk, ELF Beauty, and Celsius are among the stocks that are standing out in a struggling market. Spotify has recently flashed a buy signal, rebounding from the 10-week line and above an October breakout. Nvidia is finding support at its 10-week and is not far from potential buy points. Novo Nordisk broke out to new highs in a strong week for medical plays. ELF Beauty has pulled below a buy point but is finding support around the 21-day moving average. Celsius is rebounding from support and pushing back above its 10-week line, indicating potential entry points for investors.
Inflation Data and Financial Earnings Take Center Stage
The coming week will see two major inflation reports that will be the focus of investor attention. With inflation having fallen significantly in recent months, there is some concern that the next batch of data won’t be so favorable. The consumer price index for December is forecasted to rise by 0.2% after a 0.1% gain in November. The core CPI, which excludes food and energy, is expected to rise by 0.3% for a second consecutive month. The producer price index will also be released, providing further insight into inflation trends. Additionally, financial earnings will kick off with banks reporting their fourth-quarter results. JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, and Bank of New York Mellon are all scheduled to report. While Wells Fargo is expected to deliver an earnings increase, others may face a slowdown in earnings growth.
AI Takes the Spotlight at Consumer Electronics Show
The annual CES consumer technology trade show, held in Las Vegas, is set to open with a focus on artificial intelligence (AI). Companies attending the show will be showcasing AI applications for various industries such as autos, kitchens, home security, digital health, photography, and PCs. Keynote speakers at the conference include chief executives from tech firms like Intel, Qualcomm, and Snap, as well as retail giants Best Buy and Walmart, and beauty products giant L’Oreal. The conference is expected to attract over 130,000 attendees and feature more than 4,000 exhibitors. With AI taking center stage, this year’s CES promises to be an exciting event with the potential to shape the future of technology.
Software Earnings: Recent Breakouts To Report
Expectations for growth reports from India-based IT consulting and outsourcing firms are sluggish. Infosys will report its fiscal Q3 earnings, with analysts estimating a slight decline in adjusted profit and flat revenue compared to the previous year. Wipro is also scheduled to report earnings, with projections of a decrease in adjusted profit and a slight dip in revenue. Both stocks experienced breakouts in December, and their earnings reports will provide further insight into their performance and growth prospects.
Analyst comment
1. Big Benchmarks Slip as Dow and Nasdaq Post Weekly Decline: Negative news. The market is facing a decline as the Dow and Nasdaq both experience their first weekly decline since October. Solar stocks, auto retailers, and the chip sector have been hit hard.
2. Key Events to Watch: Health Care Conference and CES Show: Neutral news. The health care conference and CES show have the potential to impact the market and provide insight into emerging trends. Investors should keep an eye on these events.
3. Stocks to Watch: Finding Strength in a Struggling Market: Positive news. Despite the market challenges, certain stocks like Spotify, Nvidia, Novo Nordisk, ELF Beauty, and Celsius are showing relative strength and potential entry points for investors.
4. Inflation Data and Financial Earnings Take Center Stage: Neutral news. Investors will focus on major inflation reports and financial earnings from banks. Concerns about a slowdown in earnings growth may arise, but the impact on the market is uncertain.
5. AI Takes the Spotlight at Consumer Electronics Show: Positive news. The CES show will showcase AI applications for various industries, potentially shaping the future of technology. This event promises to be exciting and could have a positive impact on the market.
6. Software Earnings: Recent Breakouts To Report: Neutral news. Expectations for growth reports from Infosys and Wipro are sluggish, but their earnings reports will provide further insight into their performance and growth prospects for investors.
