January 26, 2024

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Trendsetters, ditch the popcorn and grab your war paint – the market's about to serve up a fantastic feast of opportunity, and you're invited to the front row! Forget "all-time highs" – the broader market's screams "new era, baby!" This bull's back, not waltzing, but sprinting towards greener numbers.

Dive in with us as we crack the code of the uranium chart that's got everyone buzzing (minus the dance moves, we're on brand, promise!). We'll dissect the market-moving news that's rattling cages and separating trendsetters from trend-followers. Plus, we'll toss in some financial trivia that'll make you the Robin Hood of your water cooler chat.

Ready to level up your trading game? Buckle down, and join us for a deep dive into the market's hottest trends. Let's make this Friday a financial fiesta you won't forget!

(Fun fact: Did you know the average person spends two years of their life waiting in line? Don't let market indecision be your queue – join the Trendsters and get ahead of the curve!)

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Just five companies, all heavily involved with AI, have boosted the major averages into bull market territory.

One of those stocks, Nvidia, was up 189% in the first half alone.

Nvidia is a legendary home run, but our Weiss Ratings AI specialist, Jon Markman, has homed in on one high-rated AI stock in particular

Today's Market Mood: EXTREMELY BULLISH!

The Bear-Bull Meter

Forget ticker tape parades, the market's setting up for a grand finale this week. The S&P 500 tapped its toes on a record high five days in a row, thanks to a GDP report that blitzed past expectations. While the pace cooled from the third quarter's sizzling performance, it still moved past analysts' forecasts, leaving investors feeling like they'd stumbled into a confetti shower of optimism.

But this ain't no one-man show. Broader market themes are stealing the spotlight, with energy companies basking in the glow of rising oil prices and whispers of Middle East tensions. Tech giants, meanwhile, are warming up for next week's earnings extravaganza, poised to influence the market's encore. Apple, Amazon, Google, Facebook, and Microsoft – the industry's leading lights – are ready to take center stage, their performances potentially shaping the narrative for the entire earnings season.

So, what's the director's advice? Our research team believes the GDP report paints a picture of a resilient economy, with inflation making a graceful move back towards the Fed's target. This fuels investor belief in a soft landing for the economy, avoiding the dreaded recessionary curtain call.

The Takeaway:

• Growth takes center stage: Beyond the usual mega-cap mambo, broader market sectors are adding their own flavor to the performance. Keep an eye on energy and tech, both poised for potential breakouts.
• Tech earnings in the spotlight: Next week's tech earnings extravaganza could be the market's defining moment. Watch Apple, Amazon, Google, Facebook, and Microsoft closely – their performances could set the tone for the entire show.
• Soft landing symphony: The GDP report and inflation's downward trend are music to investors' ears. The research team suggests a smooth landing for the economy, but stay tuned for any plot twists.

Strategies:

• Don't just focus on the mega-cap headliners. Explore the promising themes in energy and other sectors to add depth and resilience to your holdings.
• If you're bullish on tech, consider strategic options or stock adjustments ahead of next week's earnings announcements. Remember, volatility is likely, so manage your risk accordingly.
• The market's a dynamic beast, so keep your finger on the pulse of economic data and earnings reports. Be ready to adapt your strategy as the plot unfolds.

This week's market performance is a reminder that the show must go on, and it's likely to be a captivating one. So, grab your popcorn, Trendsters, and settle in for the next act. The market's got a lot more to offer, and we're here to guide you through every curtain rise and curtain fall.

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Remember Tesla's dramatic 12% drop that shook the Nasdaq last night? Turns out, it wasn't just Elon Musk tweeting memes from the bathtub. A giant $8.5 billion options bet gone wrong was the real culprit. Imagine it like this:

(Picture a high-stakes poker game.) A wealthy investor, feeling confident in Tesla's soaring price, placed a massive bet that it would keep climbing. They bet on what's called "call options," essentially contracts promising to buy the stock at a set price in the future. It was a bold move, like going all-in with a pair of aces.

(But then, the market dealt a cruel hand.) Tesla stock unexpectedly dipped, leaving the investor's options underwater. Ouch! Now they were on the hook for potentially buying tons of shares at a much higher price than the stock was worth. Talk about a bad investment decision!

(This whale-sized bet unraveling created ripples across the market, contributing to the Nasdaq's shaky performance.) It's a reminder that even the mightiest investors can get caught in unexpected currents. So, while we love a good Elon tweet storm, keep an eye on the big players splashing around in the options pool too. You never know who might cause the next wave.

Another Bonus trivia: Whales aren't the only creatures making waves in the market. Dolphins, a smaller but equally impactful group of investors, use similar strategies to bet on market movements. It's a whole aquatic ecosystem down there!

Uranium's Glowing Ascent

Forget sunshine and sunflowers, uranium's the real ray of light scorching up the investing landscape. This chart might not scream record highs just yet, but trust me, the bull market here is just gearing up for a nuclear meltdown of epic proportions.

Why the bullish glow? Let's crackle with some key catalysts:

• Supply hiccups, galore: Bigwigs like Cameco and Kazatomprom are fumbling production goals like toddlers with glow sticks. Expect clarity on these stumbles soon, but for now, it's a supply squeeze party.
• Russia's radioactive roulette: The House already said "nyet" to Russian uranium, and while the Senate's tangoing with Ted Cruz's tap-dancing feet, Putin might retaliate with an export ban. Buckle up, that's a game-changer.
• Media's slow acceptance: Forget FOMO, this party's just getting started. Uranium's still warming up to the spotlight, so brace yourselves for a tidal wave of hype once Wall Street catches on.
• Demand's insatiable appetite: Picture this, tiny market, colossal power needs. Utilities are chomping at the radioactive bit, and with supply deficits looming like radioactive shadows, uranium's about to become the priciest fuel on the block.

Think $200/lb by year-end sounds ludicrous? Think again. For utilities, uranium's a drop in the radioactive ocean compared to shutting down a reactor. They'll pay through the nose, and this chart's gonna glow hotter than Chernobyl's core.

 

So ditch the sunscreen, grab your Geiger counters, and get ready to ride the uranium wave. This bull market's got more fission than a Tokyo sushi bar, and you won't want to miss the meltdown.

 

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While Wall Street celebrates the S&P 500's early sprint past year-end targets, a deeper story unfolds beneath the surface. Yes, the headline index races ahead, propelled by a select group of mega-cap tech titans. But scratch beneath the shiny facade, and you'll find a different scene – one of consolidation and muted performance for smaller equities and other sectors.

This divergence paints a picture of a market seeking broader balance. It's reminiscent of 2023's first half, where megacap dominance masked underlying struggles. The question now is: when will this broader market find its own footing?

My answer? Look beyond the usual suspects. Focus on the equal-weight S&P 500, where all companies wield equal weight, unmasking the true extent of consolidation. This index, currently down 1.2% year-to-date, tells a different story than the headline-grabbing megacap rally. The Russell 2000 small-cap index paints a similar picture, down over 3%.

The key? Reaching a new all-time high in this equal-weight S&P 500. That, for me, would signal the end of this consolidation phase and a true broadening of the market's momentum. And I believe it's coming, likely within Q1.

Why such conviction? Recent economic data whispers sweet nothings, suggesting a "Goldilocks" scenario of strengthening growth and easing cost pressures. The latest Flash PMI – a real-time pulse on economic activity – surged to a 7-month high, with both manufacturing and services sectors expanding. Notably, manufacturing, after 15 months of contraction, finally climbed above the 50 mark, indicative of growth.

Even better news? Price pressures continue to cool, offering the Fed room for a potential pivot towards a less restrictive stance at its March meeting. This is the sweet spot for markets – robust, yet balanced growth with moderating inflation.

While the headlines sing of record highs, smart investorss should look beyond the megacap chorus. We seek the melody of broader market participation, the harmony of balanced growth. And by listening closely to the economic data's whispers, we can anticipate the rhythm of a market poised for a more inclusive bull blitz.

The market symphony played a discordant tune today, with some instruments soaring while others sputtered. Here's a quick breakdown:

Standing Ovation:

• Avis revved up 3.9%, fueled by Citigroup's upgrade and a "steady operator" thumbs-up. Looks like the road ahead is paved with smooth earnings.
• IBM took a 9.5% victory lap after exceeding analysts' expectations with a quarterly performance that hit the sweet spot.
• Las Vegas Sands rolled a lucky 1%, thanks to better-than-expected earnings and revenue. The casino king seems to be winning the hand against economic uncertainty.
• Valero Energy struck gold with a 3.3% surge after surpassing both earnings and revenue targets. This oil refiner is clearly refining its way to success.

 

Curtain Call:

• Boeing hit turbulence with a 5.7% nosedive after Bank of America downgraded its outlook, citing production woes with the 737 Max. Looks like smooth skies might be further down the runway.
• Humana's health took a 12% hit as its earnings met expectations, but its full-year guidance missed analysts' mark by a mile. Investors might be feeling under the weather.
• Tesla's electric dreams sputtered, falling to an eight-month low after missing earnings targets and lowering growth forecasts for 2024. The road to EV domination might have a few bumps.
• Union Pacific choo-chooed a 0.3% decline despite exceeding earnings expectations. Weaker coal demand and economic jitters cast a shadow on the tracks ahead.

On the Radar:

• Keep your eyes peeled for American Express, Colgate-Palmolive, and Norfolk-Southern as they release quarterly results on Friday.
• The PCE price index, the Fed's favorite inflation gauge, takes center stage tomorrow. Will it offer a melody of cooling prices, or a discordant tune of continued pressure?

The Maestro's Musings:

 

The strong GDP report, with its encouraging inflation prints, has the Fed's baton trembling. A rate cut "pivot" might be on the horizon, but the timing remains a mystery. Stay tuned with us for the next developments. Remember, the market's a dynamic performance, and we're here to guide you through every act. So, grab your popcorn, Trendsters, and let the show unfold.

Random Musings

Growth Beyond the Headlines: The S&P 500's record streak is impressive, but beneath the glitter, smaller caps and broader sectors are waiting for their own spotlight. Don't just focus on the headliners, Trendsters, explore the whole stage!

Uranium's Radioactive Glow: Nuclear might not be everyone's darling, but the uranium market's potential is hard to ignore. Supply hiccups, geopolitical drama, and insatiable demand are setting the stage for a potential bull run. Brace yourselves for some fission, financial style!

Fed's Balancing Act: The Goldilocks economy – not too hot, not too cold – might just be within reach. But the Fed's tightrope walk between taming inflation and avoiding recession is no easy feat. Stay tuned for their next graceful (or clumsy?) move.

Data Whisperer: Market whispers can turn into thunder roars. Keep your ear to the ground for economic data like the PCE price index tomorrow. It could hold the key to the Fed's future melody.

Beyond the Numbers: Don't get lost in the quantitative maze. Remember, a strong economy is built on real people, real businesses, and real stories. Look beyond the spreadsheets and see the human heartbeat of the market.

On this day in history, January 26

1788: Australia Day marks the arrival of the First Fleet in Sydney Cove, paving the way for British colonization. A complex chapter in history with ongoing debates about its legacy.

1905: The world's first successful radio transmission occurs thanks to Marconi's pioneering work. This technological spark ignited a revolution in communication.

1950: India adopts its constitution, solidifying its status as a democratic republic after gaining independence from the British Empire. A landmark moment for the world's largest democracy.

1994: The North American Free Trade Agreement (NAFTA) comes into effect, creating a trilateral trade bloc between the US, Canada, and Mexico. Its impact on economies and jobs continues to be debated.

1998: Bill Clinton's Impeachment Saga Begins! The U.S. Senate votes to impeach President Clinton, marking a tumultuous chapter in American political history.

Today's market was like a first date – nerves, excitement, and a whole lot of wondering what the other side is thinking. The S&P 500 sprinted past its year-end target, but broader sectors and smaller caps kept their boots firmly planted on the sidelines. Meanwhile, uranium's glow intensified, hinting at a potential nuclear romance with investors.

As for the Fed? Their next move remains shrouded in mystery. But the latest economic data, like a whispered love letter, suggests they might be ready for a slower, more graceful dance with the economy.

And as the great philosopher, George Carlin, once said: "The only difference between a stock market and a casino is that at a casino, you know the odds are against you."

Having said that,  maybe keep a lucky rabbit's foot handy – you never know what might work in this wild ride we call the market.

Until next time, Trendsters!

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