Blog: Market Analysis

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Market Recap & Upcoming Week

Last week in the markets saw a gentle start to 2024 following the strong rally at the end of 2023.

While the S&P 500’s slight pullback reflects a period of consolidation, underlying market movements suggest a shift, with pressure on small-cap stocks and investment-grade bonds.

Tech and communication services sectors continue to lead, with health care and consumer staples sectors showing outperformance.

Looking ahead, important economic indicators due this month include U.S.

GDP growth data and the PCE inflation report, which will shed light on economic health and inflation trends.

The Federal Reserve’s rate decision at the end of January will also be crucial, with current market expectations leaning towards rate cuts later in the year.

These data points will guide investor strategies amidst the anticipated market volatility early in the year.

Investors should brace for an eventful week as several industry giants are poised to report their earnings, with Netflix kicking off on Tuesday, Tesla following on Wednesday, and Intel rounding out on Thursday.

Additionally, a vital glimpse into the U.S. economy’s performance in the fourth quarter will be provided with the government’s preliminary GDP report, also expected on Thursday.

The week will also be packed with a suite of economic data releases that could impact market movements, including new and pending home sales and durable-goods orders.

Market participants will closely scrutinize PMIs and the Personal Consumption Expenditures Price Index, the Fed’s favored inflation metric, to gauge economic health and inflationary pressures.

Daily Trading Signals (Highlights)

NASDAQ 100 E-mini Futures (NQ1!) – We are very close to ATHs now! 💰🔥💪

Advanced Micro Devices (AMD) – Breaking to new all time highs!

NextEra Energy (NEE) – Clean energy stocks are not doing too well in general, and this stock just broke down from a bearish rising wedge on the weekly chart, at the confluence of multiple EMA resistances.

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Spencer is an avid globetrotter who achieved financial freedom in his 20s, while trading & teaching across 70+ countries. As a former professional trader in private equity and proprietary funds, he has over 15 years of market experience, and has been featured on more than 20 occasions in the media.

Weekly Market Wrap: Successful Launch of Bitcoin ETFs!

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Market Recap & Upcoming Week

Last week’s financial markets were abuzz with discussions on inflation and the Federal Reserve’s monetary policy, as well as the surge in Crypto prices due to the approval of Bitcoin ETFs.

The Consumer Price Index (CPI) indicated a slight uptick to 3.4% year-over-year in December, signaling a challenging road ahead to the Fed’s 2% inflation target. Core CPI, excluding food and energy, showed a modest decline. Notably, services costs, particularly shelter and car insurance, were significant inflation drivers.

Despite these pressures, the overall trend in inflation continues to decline, with expectations that it will normalize over the year. Moreover, positive indicators like slowing rent increases and declining job openings hint at a downward trajectory for inflation.

However, a recent surge in shipping costs due to disruptions in the Suez Canal could pose a risk, potentially impacting consumer prices if prolonged.

In response to the inflation data, expectations around the Federal Reserve’s rate cuts have become a focal point. The bond market anticipates a high likelihood of rate cuts starting as early as March, but this may be overly optimistic.

The Fed is likely to maintain a cautious approach, with more data on inflation and job reports due in the coming months. This cautious stance could introduce market volatility, but the broader expectation is a shift towards easing monetary policy in the latter half of the year.

Alongside these macroeconomic developments, the stock market has shown resilience. The rebound in forward earnings and new market highs suggest a continuing uptrend in stocks.

Opportunities are seen in buying potential pullbacks and diversifying into underperforming market segments, with an eye towards extending investment duration in anticipation of an easing Fed cycle.

This week in the financial markets starts with a pause as markets are closed on Monday, January 15th, in observance of Martin Luther King Jr. Day.

Simultaneously, the annual World Economic Forum in Davos begins, bringing together a global assembly of business and political leaders. This event could provide key insights into the global economic outlook and potentially influence market sentiment.

Upon reopening on Tuesday, the markets will shift focus to the banking sector with Morgan Stanley and Goldman Sachs releasing their earnings, which could set the tone for market performance.

Housing market data, including housing starts and existing home sales, will be closely watched as key indicators of economic health. Additionally, remarks from Federal Reserve Governor Christopher Waller and Atlanta Fed President Raphael Bostic will be pivotal in shaping expectations around monetary policy.

Updates on U.S. retail sales, industrial production, and consumer sentiment throughout the week will provide further clarity on the economic landscape.

Lastly, a critical deadline looms on Friday for Congress to fund certain U.S. government agencies, with a potential government shutdown hanging in the balance.

Daily Trading Signals (Highlights)

NASDAQ 100 E-mini Futures (NQ1!) – Following up, the rebound happened as predicted, and good chance the uptrend is going to resume.

Congrats to those who bought the dip! 👏🔥👍

Ethereum (ETHUSD) – Strong breakout after the news, heading to test the $2900/3000 level! 💰🔥💪

Bitcoin (BTCUSD) – Bitcoin also had a nice breakout a few days ago, high chance it is going to gun for $50/51k price level! 💰👍💪

Doing a quick comparison, lowest fees are BITB and ARKB, but those with 0.25% are also still acceptable.

Based on volumes so far, the biggest 3 are FBTC, IBIT and GBTC (cos it’s the oldest probably).

So overall i am probably going with ARKB, FBTC or IBIT.

Ripple (XRP) ETF a possibility?

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Weekly Market Wrap: Small Correction for First Week of 2024

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Market Recap & Upcoming Week

2023 concluded with a minor pause in the stock market’s robust upward trajectory.

Despite the S&P 500’s moderate decline last week, the year was marked by a notable 16% rally in its last two months.

This pullback is attributed to early-year portfolio repositioning and a natural consolidation after such a substantial climb.

In the broader context, the outlook for 2024 is tinged with optimism, driven by expectations of favorable Federal Reserve interest rate decisions and a steady economic trajectory.

Nonetheless, the spirited rally into the new year has heightened expectations, potentially setting the stage for market sensitivity to any disappointing developments.

Fresh data on Federal Reserve policy intentions and labor market health emerged last week, indicating a resilient jobs market with a significant addition of 216,000 positions in December, maintaining a stable unemployment rate of 3.7%.

Despite this strength, a gradual softening is anticipated, marked by a reduction in job openings and moderated wage growth, which may temper consumer spending without pushing the economy into a recession.

Meanwhile, the Fed’s December meeting minutes suggest that while interest rate cuts are on the horizon, the market’s anticipation for an early-year cut may be overly optimistic, with policymakers erring on the side of caution and potentially postponing cuts until mid-2024.

Such a cautious approach could lead to short-term market volatility, viewed by some as a potential investment opportunity in anticipation of a supportive shift in Fed policy later in the year.

Investors entering the first complete trading week of 2024 should keep an eye on crucial economic indicators, with inflation data taking center stage.

The Consumer Price Index (CPI) from the Labor Department, a key measure of inflation for consumer goods and services, is scheduled for release on Thursday.

This will be closely followed by the Producer Price Index (PPI) on Friday, which provides insights into wholesale inflation and potentially signals future consumer price trends.

In addition to inflation data, the week will be significant for financial sector watchers as major banks begin to disclose their earnings.

Reports from industry heavyweights like JPMorgan Chase, Bank of America, Wells Fargo, Citigroup, and BNY Mellon will offer a snapshot of the banking sector’s health and set the tone for the earnings season.

Other important data slated for release include consumer credit figures, the federal trade deficit, wholesale inventories, and the National Federation of Independent Business (NFIB) Small Business Optimism Index, each contributing to a fuller picture of the current economic landscape.

Daily Trading Signals (Highlights)

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Weekly Market Wrap: How Will Financial Markets Fare in 2024?

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Market Recap & Upcoming Week

2023 closed on a high note for investors, with all 11 asset classes tracked in a common framework showing positive returns, a stark contrast to the previous year when cash was the only positive asset class.

Bonds, despite a turbulent year, have surged in the past couple of months, offering both attractive income and the potential for more price gains.

This upswing serves as a lesson on the benefits of staying invested, regardless of sometimes grim headlines.

Looking to 2024, the market may face various challenges, but optimism is warranted.

There’s a consensus that interest rates have reached their zenith, with the Federal Reserve setting the stage for potential rate reductions. Inflation appears to be easing, corporate profits are on the mend, and, except for the big gainers of the year, valuations are generally sensible.

As investors return from the New Year’s Day holiday, they face a packed week of economic data releases and a fresh round of corporate earnings.

The Atlanta Federal Reserve’s GDP projection will set the tone, complemented by insights from construction spending and factory orders.

The FOMC minutes release is highly anticipated, offering a deeper dive into the rationale behind the Fed’s latest interest rate decision, which could sway market sentiments.

The week’s highlight is Friday’s employment report, expected to draw significant investor focus, while additional labor market details will emerge from job openings, initial jobless claims, and private-sector employment data.

On the earnings front, Walgreens Boots Alliance, Conagra Brands, and Constellation Brands stand out as major companies reporting this week, potentially impacting market movements.

Daily Trading Signals (Highlights)

Solana (SOL) – Following up on this trade, we bought at around $58, and now it is around $113, giving up a +93% profit in just one month! Congrats to all subscribers who took this trade! 👏🔥📈

For those who missed this, the good news is that the crypto season is just getting started, and many more great opportunities will be coming in 2024.

GBPCHF – Following up on this trade, it managed to hit our first TP of 250 pips profit in just a few days, and went on to 350 pips! (for those who took half profits and used a trailing stop.)

Congrats to those who took this trade! 👏🔥💪

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Weekly Market Wrap: Everything is on a Bull Run this Christmas!

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Market Recap & Upcoming Week

As 2023 comes to a close, the markets have seen a year marked by significant events and trends, shaping up to be a year of recovery and resilience.

The year started and ended with strong rallies, overshadowing the spring’s regional bank crisis and fall’s concerns about rising interest rates. The middle of the year witnessed a robust summer rally, driven by a surprisingly resilient economy.

This resulted in equities delivering double-digit gains and a remarkable comeback for bonds. As we look back, 2023 stands as a testament to the benefits of a disciplined investment strategy and the value of seizing opportunities during market lows.

In the stock market, the S&P 500 experienced an impressive eight-week winning streak, a rare occurrence in the past 50 years. This rebound, particularly remarkable after the fall’s pressures due to surging interest rates, highlights the market’s dynamic nature where rapid shifts from loss to gain can occur.

Despite expectations for a quiet holiday week, the market’s momentum might carry this winning streak further. However, a pause is likely as we transition into 2024, awaiting new economic and inflation data.

While this winning phase will eventually end, the broader bull market’s end doesn’t seem imminent, reinforcing the importance of long-term strategy in investment.

This week, despite being shortened by the Christmas holiday, could still offer significant market movements. Investors are anticipating a potential “Santa Claus rally” to end the year on a strong note.

The bond markets will wrap up early at 2 p.m. on Friday, December 29.

Key economic data releases are few but noteworthy, focusing on the U.S. housing market. The S&P Case-Shiller Home Price Index and the National Association of Realtors’ pending home sales data are due, along with weekly initial jobless claims, inventory, and trade balance information.

Additionally, the holiday sales season continues, with retailers expected to offer substantial discounts to clear inventories.

Housing market data will be a focal point with the S&P Case-Shiller Home Price Index set for release, potentially shedding light on housing affordability trends.

Thursday’s pending home sales data from NAR is also anticipated, following an increase in existing home sales in November.

These reports come amidst growing homebuilder confidence. Meanwhile, the possibility of a “Santa Claus rally” looms, a phenomenon where the S&P 500 historically gains during the final days of the year and the start of the new year.

This trend, though not guaranteed, is often attributed to factors like holiday shopping, seasonal optimism, and institutional investors balancing their books.

Daily Trading Signals (Highlights)

S&P 500 E-mini Futures (ES1!) – Prices have hit our target which is the previous major resistance level, congrats to those who took this trade! 👏🔥📈

Since RSI is quite overbought, there is a good chance of some sideways movement or a slight correction before the uptrend resumes, so might be a good idea to take part or whole profits.

US 20+ yr Treasury Bond ETF (TLT) – Following up on this, prices have gone up an impressive 21.94% since the October bottom just 2+ months ago.

Congrats to those who took this position! 😎🔥💪

Going forward, since rate cuts are expected to start in 2024, I foresee some consolidation (now overbought on RSI) before breaking past $100 and to $105.

Solana (SOL) – Did not expect Solana to hit my target so fast, already up +50% profit from our buy price! 😎🔥💪

Revised the target upwards because it looks like the early stages of a bull trend.

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