EB Daily Market Report - Wednesday, January 29, 2025
Executive Summary
- Our futures were little changed overnight and our major indices have been mostly in negative territory, but barely
- The 10-year treasury yield ($TNX) has barely changed as well as both the stock and bond market prepare for the Fed's policy statement, which will be out momentarily
- Technology (XLK, -1.25%) is seeing weakness, but all other sectors are between +0.50% and -0.50%
- Cryptocurrencies are mostly up fractionally, with bitcoin ($BTCUSD, +1.18%) leading the charge
- Commodities are mixed as crude oil ($WTIC, -1.23%) falls below $73 per barrel
- Earnings are beginning to roll in with solid earnings reactions from F5 Networks (FFIV, +10.34%), Starbucks (SBUX, +8.58%), and T-Mobile (TMUS, +6.89%)
- There'll be big Mag 7 names reporting after the close today, including Apple (AAPL, -0.58%), Microsoft (MSFT, -1.08%), and Meta Platforms (META, -0.19%)
- The Fed decision was just released and no change was made in interest rates, though there appeared to be a bit more emphasis on inflation in the policy statement
- Stocks initially fell and I have exited the TNA position established this morning during our Live Trading Room, awaiting the close to see if the IWM can hold onto 225 price support; it trades right now at 224.97
- What will the Fed Chief say at 2:30? Who knows, but it'll likely have a huge impact on where we close today's session
Market Outlook
There always seems to be negativity in the air whenever the stock market is discussed. This is nothing more than a reminder that our major indices remain squarely in long-term uptrends:
A lot of bad things can be said about the stock market over the past 10 years, and maybe folks will get more bearish over the next couple months, but don't lose sight of what's TRULY going on in the U.S. stock market. We are in a long-term secular bull market and pullbacks, even corrections and cyclical bear markets, are nothing more than noise.
Sectors/Industries
Let's look quickly at semiconductors ($DJUSSC). On the daily chart, it's easy to see the following break down:
I find it interesting that the AD line continues to the upside in fairly consistent fashion. It simply suggests to me that the selling that we've seen during the last several months of consolidation is not a whole lot more than manipulation - semi stocks moving from weak hands into strong hands.
Look at what this period of consolidation has done for the DJUSSC's weekly chart:
The PPO is nearing a centerline reset and there's been a 50-week SMA test for the first time in 2 years. Also, the weekly RSI has dipped into the 40s. History tells us that these developments have resulted in key bottoms in the DJUSSC. Will this time be different?
ChartLists and Trading Strategies
It's very difficult to place too many trades just before an FOMC announcement. It's quite likely that there'll be no change in the fed funds rate. However, what might the Fed Chief say AFTER the policy statement is delivered? That's going to be much more critical and, quite honestly, it's a great big unknown from month to month.
Upcoming Earnings
The following are expected earnings reports after today's close and before tomorrow's open. Stocks highlighted in BOLD represent stocks included in one of our portfolios.
Wednesday, January 29 (after market close):
MSFT, META, TSLA, NOW, IBM, LRCX, WM, CP, AMP, URI, RJF, WDC, TER, CLS, CHRW TTEK, NLY, SEIC, DLB, AXS, WHR
Thursday, January 30 (before market open):
MA, TMO, SHEL, CAT, CMCSA, SNY, BX, UPS, MMC, SHW, TT, PH, MO, CI, NOC, ROP, VLO, LHX, CAH, TSCO, DOW, DOV, NOK, PHM, STM, CHKP, IP, LUV, DGX, DT, AVY, RCI, MBLY, CRS
Economic Reports
December wholesale inventories: -0.5% (actual) vs. +0.3% (estimate)
Happy trading!
Tom