EB Daily Market Report - Wednesday, January 10, 2024

Tom Bowley - January 10, 2024

ChartList Updated

The Raised Guidance ChartList has been updated. It'll be posted on our website later today or first thing in the morning. In addition to updating the list with companies that have raised guidance over the past few weeks, I also updated the next earnings date in the name of each chart. Our source for these dates was StockCharts.com and these dates do occasionally change as we move further into earnings season. But, as of today, and per StockCharts.com, they've been updated. Please continue to check for earnings dates of companies that you own, so that you don't get an unwelcome surprise.

Executive Market Summary

Futures were relatively flat as we approached the opening bell this morning; the Russell 2000 (IWM) has lagged throughout the day, but just turned positive around 2pm ET
Leadership today is found in areas of growth; communication services (XLC, +1.26%), consumer discretionary (XLY, +0.94%), and technology (XLK, +0.91%) are today's leading sectors
Energy (XLE, -0.89%) is the clear laggard as crude oil prices ($WTIC, -1.33%) have dropped to $71 per barrel after being higher earlier this morning
Etherium ($ETHUSD, +9.58%) is breaking out of its 5-week consolidation period, following bitcoin's ($BTCUSD, -0.78%) lead from Monday - the ETHUSD chart is featured below
Commodities are mostly lower, but copper ($COPPER, +0.82%) is an exception and moving higher after its recent decline from 3.97 to 3.76
The 10-year treasury yield ($TNX) is up another basis point to 4.03% today, after the yield had earlier dropped to 3.99%; I could see up to a 20 basis point move tomorrow if the Core CPI veers much from the anticipated +0.2% increase
Meta Platforms (META, +3.58%) is breaking out again and showing excellent leadership in the internet space ($DJUSNS, +1.88%)
Home Depot (HD, +2.71%) is breaking out to send the Dow Jones to new all-time highs today
The December CPI will be released at 8:30am ET on Thursday morning, one hour before the opening bell; this is a market-moving economic report, so understand the overnight risk is fairly high, whether you're bullish or bearish

Market Outlook

We've reached the all-time high close on the S&P 500 and within a whisker of testing the all-time intraday high on this benchmark index. Here's a quick glance at where we stand:

I don't know where we'll finish today, but we're certainly threatening to close at an all-time high. And given the December CPI that will be released tomorrow morning, it's not difficult to see that we'll likely see either a MAJOR upside breakout or a key pivot point and short-term top on Thursday. Flip a coin and take your pick.

Sector/Industry Focus

Cryptocurrencies have been flying since mid-October, perhaps providing us an early clue of the "risk-on" environment we've seen with stocks since late-October. After seeing bitcoin ($BTCUSD) breaking out on Monday, etherium ($ETHUSD) is doing the same today. Check out these two cryptos:

These consolidation zones are normal continuation patterns. Many traders refer to this type of continuation pattern as a "bull flag." The uptrend is the flag pole and the consolidation zone is the flag. A breakout of a continuation pattern is bullish and suggests that we look for further strength ahead.

ChartLists/Strategies

A week or so ago, I pointed out that the internet group likes the month of January historically. Specifically, I had mentioned that META, GOOGL, and NFLX could be setting up for nice pre-earnings advances. All three have moved higher with META making a breakout (intraday) and GOOGL nearing one:

META:

GOOGL:

This is typical January behavior and we really shouldn't be surprised.

Earnings Reports

Here are the key earnings reports for the next two days, featuring stocks with market caps of more than $10 billion. I also include notable companies with market caps below $10 billion. Finally, any portfolio stocks that will be reporting results are highlighted in BOLD. If you decide to hold a stock into earnings, please understand the significant short-term risk that you are taking. Please be sure to check for earnings dates for any companies that you own or are considering owning.

Wednesday, January 10:

KBH

Thursday, January 11:

INFY

Economic Reports

November wholesale inventories: -0.2% (actual) vs. -0.1% (estimate)

Happy trading!

Tom