MARKETS TODAY Jan 6 (Vica Partners)
DOW (^DJI) 33,631 (+701), S&P 500 (^GSPC) 3,958 (+87), Nasdaq (^IXIC) 10,569 (+264), Russell 2000 (^RUT) 1,793 (+40), NYSE FANG+ (^NYFANG) 4,402 (+108), Brent Crude $78.57/barrel (-$0.12), Gold $1,866/oz (+$33), Bitcoin 16.9k (+$93)
Session Overview
The Dow Jones Industrial Average ended 700 points higher today, rallying by 2.13% to close at 33,630.61. The best performing sectors were the Materials and Information Technology sectors, up 3.58% and 3.25% respectively. Health Care was the laggard, up only 1.13% on the day.
In economic news and on a bullish note, nonfarm payrolls increased by 223,000 for the month pushing the unemployment rate back to a pre-pandemic low of 3.5%. Low inflationary reports drove the rally today as Average hourly earnings rose a less-than-expected 0.3% points, up 4.6% year-on-year, the smallest growth in four months while U.S. services industry activity contracted in December, for the first time in more than 2-1/2 years. New orders for U.S.-made capital goods rose moderately in November while shipments fell, pointing to a slowdown in business spending on equipment this quarter.
Technicals/ Sector Performance/ Yields+
11 of 11 of S&P 500 Sectors were higher today;
The best performing sectors were the Materials and Information Technology sectors, up 3.58% and 3.25% respectively. Health Care was the laggard, up only 1.13% on the day.
Yields all declining inter-day: US – 2yr to 4.254%, 5yr to 3.701%, 10yr to 3.556%, 30yr to 3.686%
Greed Index Rating 46/ Neutral
U.S Economic News
- Nonfarm payrolls; Nonfarm payrolls increased by 223,000 for the month, above the Dow Jones estimate for 200,000. Nonfarm Payrolls measures the change in the number of people employed during the previous month. Job creation is the foremost indicator of consumer spending. A higher than expected reading should be taken as positive/bullish.
- Unemployment rate; unemployment rate declined to 3.5% from 3.6% back to a pre-pandemic low.
- Average hourly earnings; earnings for all employees on US private nonfarm payrolls rose by 9 cents, or 0.3%, to $32.82 in December of 2022, following a downwardly revised 0.4% gain in the prior month and below market forecasts of a 0.4% increase.
- Labor force participation rate, ages 25-54; was 82.40% in November of 2022. Historically, United States – Labor Force Participation Rate – 25-54 Yrs. reached a record high of 84.60 in January of 1999
- ISM services index; Composite Index is at 49.6 percent and is down 6.9 from 56.5 last month. Today’s number came in below forecast of 55.1 percent.
The ISM surveys for services firms’ purchasing and supply executives. The services report measures business activity for the overall economy; above 50 indicating growth, while below 50 indicating contraction.
- Factory orders; New orders for US manufactured goods decreased by 1.8 percent in November of 2022, down following three consecutive monthly increases and after a downwardly revised 0.4 percent increase in October. New orders for U.S.-manufactured goods fell more than expected amid a sharp decline in bookings for aircraft.
- Core equipment orders; New orders for U.S.-made capital goods rose moderately in November while shipments fell, pointing to a slowdown in business spending on equipment this quarter.
- Fed comments today; Fed’s Bostic backs raising interest rates to 5.25%, says he is agnostic about size of expected February move. Fed’s Cook says inflation remains ‘far too high’ despite some encouraging signs.
Other Asset Classes:
- CBOE Volatility Index (^VIX): +1.33 to 21.13
- USD index: +$1.13 to $103.91
- Oil prices – Brent: -0.15% to $78.57, WTI: +0.07% to $73.72, Nat Gas: +0.89% to $3.753
- Gold: +1.81% to $1,866.06, Silver: +2.61% to $23.83, Copper: +2.72% to $3.92
- Bitcoin: +0.56% to $16.9k
In world news
- The world economy faces a huge stress test in 2023 The Guardian
- Samsung profits fall 69% as demand for semiconductors slumps Financial Times
- Japan finance minister to visit Singapore, Vietnam next week Reuters
Vica Momentum Stock Report
Steel Dynamics (STLD) $SDLT. (Momentum Grade B) (Value A) (Growth A-) 50 Day Average +5.94%, 100 Day Average 23.89%, 200 Day Average 22.93%
Steel Dynamics, Inc. is a leading steel producer and metal recycler in the United States. The company makes and markets steel products, processes and sells recycled ferrous and nonferrous metals, and fabricates and sells steel joist and decking products in the United States and internationally.
Market Outlook
Market Outlook and updates posted at vicapartners.com