Market Insights

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Sizing Up the S&P 500

• Index -1.6% yesterday, biggest drop since September 21.
• Potential levels:
  • 4800 (weekly peaks in December, early January)
  • 4765 (50% retracement of breakout above July high)
• RSI falling from overbought, returning into Keltner Channel.
• Potential catalysts:
  • Non-farm payrolls tomorrow
  • CPI on 2/13
  • Fed minutes on 2/21

Key News

• Hawkish news:
  • December JOLTs job openings 9.03mln vs 8.75mln est. November revised up.
  • Fed wants more confidence before cutting rates. Powell downplays March.
• Dovish news:
  • Chinese manufacturing remains in contraction.
  • U.S. Treasury planned issuance 6% below estimates
  • Crude-oil, gasoline inventories increase
  • Q4 employment cost index +0.9% vs +1% estimate
• Tesla (TSLA) sees $10 billion of capex, partly to build superchargers.
• Good bank, bad bank:
  • Oppenheimer: BAC, C, JPM, MS, UBS are “significantly undervalued”
  • New York Community Bancorp (NYB) craters on unexpected loss, dividend cut (resulting from acquisitions of Signature Bank, Flagstar Bank).
• Consumer confidence at 2yr high on inflation, employment optimism.

Mover of the Week: Photronics PLAB

• Photomasks for semiconductor production
• 12/13: Stronger demand in April, July fiscal quarters forecast
  • Management cited chip cycle upswing (echoing SIA)
  • Bloomberg: U.S. chip restrictions boosting Chinese demand for chip-capital equipment
• PLAB trades for 15x EPS, 2x sales.
  • Rivals like AMAT 20x, 5x. LRCX 28x, 8x.
• PLAB +55% in last year

Upcoming Events

• Earnings this afternoon: AAPL, AMZN, META, MCHP
• Fri 2/2: Non-farm payrolls
  • Earnings: XOM, CVX, ABBV
• Mon 2/5
  • Earnings: CAT, MCD, ON, PLTR
• Tue 2/6
  • Earnings: F, LLY, AMGN, ENPH
• Wed 2/7
  • Earnings: BABA, UBER, ARM, DIS, PYPL

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