Takeaways from Dan Ives fireside chat = Technology lots of visibility. 2024 still likely double-digit gains and "hot" Dec CPI on Thursday likely priced in

VIDEO: several things.  Takeaways from our fireside chat. We also talk about signal from 1st 5 days and the upcoming Dec CPI print(Duration: 6:49).

We are only 6 trading days into 2024, and it has been a rough start. Even yesterday, on the potential approval of a Bitcoin Spot ETF approval, there appears to be a hack of the SEC and a false tweet was posted. The last few years have shown that the full year tends to play out in January (look at 2021, 2022 and 2023).

• So far, what this tells us is 2024 is shaping up to be a challenging year for investors, but we still expect markets to overall gain double-digits with S&P 500 reaching 5,200 by YE. But most of those gains come in the second half.
• Yesterday, we hosted a fireside chat with Dan Ives, technology analyst at Wedbush. I am a fan of Dan because he spends a lot of time with “boots on the ground” meeting with companies and he also gives the larger story arc to technology, which to me matters more than EPS “beats.” The high level takeaways are:
• Visibility strong for Technology in 2024:
  – AI goes mainstream
  – Cybersecurity budgets sharply rise
  – Enterprise software spending strong
• He also sees substantial EPS upside as he believes there is as much as +20% upside to topline in 2025. Moreover, he sees valuation expansion on higher growth and M&A likely accelerates in AI and cybersecurity, given so many technology companies missed this first wave.
• His favorite stocks:
  Top large-cap stocks: MSFT -0.20%  AAPL 1.74%  TSLA 2.03%  MDB 1.63%  PLTR 1.70%
  Top cybersecurity: PANW 1.61%  ZS 0.22%  CRWD -0.49%
  Top SMID cybersecurity: TLS TENB RPD -2.03%  QLYS -1.00%
  Cybersecurity ETF: HACK 0.31%
• Regarding the “first 5 days,” we watch it closely because the year tends to play out in January.
  – close on 1/8 is key
  – positive close first 5 days.
  – S&P 500 2023 closing price: 4,770
  – S&P 500 1/8 closing price: 4,764 or down -0.1%
  – is this Signal or a Mulligan?
• We looked at the 20 instances of being “nearly flat” around the first 5 days and our takeaway is this is a mulligan. Clearly there are countervailing forces at work pushing stocks to be flat the first day.
  – of the 20 instances around a “flat” (+ or – 1%) first 5 days,
  – only 2 really saw a large down year
  – 1957 and 1974, where S&P 500 was down -14.3% and -29.7% after a slightly down 1st 5
  – both were recession years
• The takeaway? If we do not have a recession, then stocks likely produce double-digit gains, mostly in 2H24. We do not expect a recession.
• Finally, Dec CPI is released on 1/11 at 8:30am ET. Markets have made sizable moves around CPI day. In the days leading up to CPI, interest rates have moved up sharply:
  – bonds are anticipating a “hot” core CPI
  – consensus is looking for Dec Core CPI MoM of +0.3%
  – so “hot” is +0.40% or higher
• We think stocks have discounted a hot CPI. Thus, we expect markets to rally post-print. After all, the glidepath for inflation is lower since housing and cars are the driver and I don’t expect cars or housing to sustainably accelerate

Bottom line: A rough start to 2024, and tells us to expect a rough 2024 but double-digit gains

The start of the year is telling us to expect a challenging year but we still expect up. And as noted in our earlier notes, we got within 1% of all-time highs and the longest to a subsequent high is 21 days. So new highs in January are expected. There is never an instance of getting within 1% of all-time highs and no new highs.

• we favor small-caps IWM 0.18%  and even still view this despite a rocky start
• our favorite large-cap sector is Financials XLF -0.41%  KRE -0.26%
• we also like Industrials on bottoming PMIs XLI -0.42%
• we like Technology/FAANG XLK 0.50%  QQQ 0.20%  and see above for some point

Key incoming data January:

• 1/02 9:45am ET S&P Global Manufacturing PMI December FinalMixed
• 1/03 10am ET December ISM ManufacturingTame
• 1/03 10am ET JOLTS Job Openings NovemberTame
• 1/03 2pm ET December FOMC Meeting MinutesTame
• 1/04 9:45am ET S&P Global Services & Composite PMI December FinalTame
• 1/05 8:30am ET December Jobs ReportMixed
• 1/05 10am ET December ISM ServicesTame
• 1/08 9am ET Manheim Used Vehicle Index December FinalTame
• 1/11 8:30am ET December CPI
• 1/12 8:30am ET December PPI
• 1/16 8:30am ET January Empire Manufacturing Survey
• 1/17 8:30am ET January New York Fed Business Activity Survey
• 1/17 8:30am ET December Retail Sales Data
• 1/17 9am ET Manheim Used Vehicle Index January Mid-Month
• 1/17 10am EST January NAHB Housing Market Index
• 1/19 8:30am ET January Philly Fed Business Outlook Survey
• 1/19 10am ET U. Mich. Sentiment and Inflation Expectation January Prelim
• 1/24 9:45am ET S&P Global PMI January Prelim
• 1/25 8:30am ET 4QA 2023 GDP
• 1/26 8:30am ET December PCE
• 1/29 9:30am ET Dallas Fed January Manufacturing Activity Survey
• 1/30 9am ET January S&P CoreLogic CS home price
• 1/30 10am ET January Conference Board Consumer Confidence
• 1/30 10am ET JOLTS Job Openings December
• 1/31 2pm ET FOMC Rate Decision

Key incoming data December

• 12/01 9:45am ET S&P Global Manufacturing PMI November FinalTame 
• 12/01 10am ET November ISM ManufacturingStrong 
• 12/05 9:45am ET S&P Global Services & Composite PMI November FinalStrong 
• 12/05 10am ET JOLTS Job Openings OctoberTame 
• 12/05 10am ET November ISM ServicesStrong 
• 12/06 8:30am ET 3QF 2023 Nonfarm ProductivityStrong 
• 12/07 9am ET Manheim Used Vehicle Index November FinalTame 
• 12/08 8:30am ET November Jobs ReportTame 
• 12/08 10am ET U. Mich. Sentiment and Inflation Expectation December PrelimTame 
• 12/12 8:30am ET November CPITame 
• 12/13 8:30am ET November PPITame
• 12/13 2pm ET FOMC Rate DecisionDovish
• 12/14 8:30am ET November Retail Sales DataTame
• 12/15 8:30am ET December Empire Manufacturing SurveyTame
• 12/15 9:45am ET S&P Global PMI December PrelimTame
• 12/18 8:30am ET December New York Fed Business Activity SurveyTame
• 12/18 10am ET December NAHB Housing Market IndexTame
• 12/19 9am ET Manheim Used Vehicle Index December Mid-MonthTame
• 12/20 10am ET December Conference Board Consumer ConfidenceTame
• 12/21 8:30am ET 3QT 2023 GDPMixed
• 12/21 8:30am ET December Philly Fed Business Outlook SurveyMixed
• 12/22 8:30am ET November PCE Tame
• 12/22 10am ET: U. Mich. Sentiment and Inflation Expectation December FinalTame
• 12/26 9am ET December S&P CoreLogic CS home priceTame
• 12/26 10:30am ET Dallas Fed December Manufacturing Activity Survey Tame
• 12/29 9:45am ET December Chicago PMI

Key incoming data November

• 11/01 9:45am ET S&P Global PMI October FinalTame 
• 11/01 10am ET JOLTS Job Openings SeptemberMixed
• 11/01 10am ET October ISM ManufacturingTame
• 11/01 10am ET Treasury 4Q23 Quarterly Refunding Press ConferenceTame
• 11/01 2pm ET FOMC Rate DecisionDovish
• 11/02 8:30am ET: 3Q23 Nonfarm ProductivityTame
• 11/03 8:30am ET October Jobs Report Tame
• 11/03 10am ET October ISM ServicesMixed
• 11/07 9am ET Manheim Used Vehicle Index October FinalTame
• 11/10 10am ET U. Mich. November prelim Sentiment and Inflation Expectation Hot
• 11/14 8:30am ET October CPI Tame
• 11/15 8:30am ET October PPI Tame
• 11/15 8:30am ET November Empire Manufacturing Survey Resilient
• 11/15 8:30am ET October Retail Sales DataResilient
• 11/16 8:30am ET November New York Fed Business Activity SurveyTame
• 11/16 8:30am ET November Philly Fed Business Outlook Survey Tame
• 11/16 10am ET November NAHB Housing Market Index Tame
• 11/17 9am ET Manheim Used Vehicle Index November Mid-MonthTame
• 11/21 2pm ET Nov FOMC Meeting MinutesTame
• 11/22 10am ET: U. Mich. November final Sentiment and Inflation ExpectationTame
• 11/24 9:45am ET S&P Global PMI November Prelim Mixed
• 11/27 10:30am ET Dallas Fed November Manufacturing Activity SurveyTame
• 11/28 9am ET November S&P CoreLogic CS home price Tame
• 11/28 10am ET November Conference Board Consumer ConfidenceTame
• 11/29 8:30am ET 3QS 2023 GDPStrong
• 11/29 2pm ET Fed Releases Beige BookTame
• 11/30 8:30am ET October PCETame

Key incoming data October

•  10/2 10am ET September ISM ManufacturingTame
•  10/3 10am ET JOLTS Job Openings AugustHot
•  10/4 10am ET September ISM ServicesTame
•  10/6 8:30am ET September Jobs ReportMixed
•  10/6 9am ET Manheim Used Vehicle Index September FinalTame
• 10/10 11am NY Fed Inflation ExpectationsMixed
•  10/11 8:30am ET September PPIMixed
•  10/11 2pm ET Sep FOMC Meeting MinutesTame
•  10/12 8:30am ET September CPIMixed
•  10/13 10am ET U. Mich. September prelim 1-yr inflationMixed
•  10/16 8:30am ET October Empire Manufacturing SurveyTame
•  10/17 8:30am ET October New York Fed Business Activity SurveyTame
• 10/17 8:30am ET September Retail Sales DataHot
•  10/17 9am ET Manheim October Mid-Month Used Vehicle Value IndexTame
•  10/17 10am ET October NAHB Housing Market IndexTame
• 10/18 8:30am ET September Housing StartsTame
• 10/18 2pm ET Fed releases Beige BookTame
•  10/19 8:30am ET October Philly Fed Business Outlook SurveyTame
• 10/19 10am ET Existing Home SalesTame
• 10/19 12pm ET Fed (including Powell) at Economic Club of New York
•  10/24 9:45am ET S&P Global PMI October PrelimTame
•  10/26 8:30am ET 3Q 2023 GDP AdvanceStrong
•  10/27 8:30am ET September PCETame
•  10/27 10am ET Oct F UMich Sentiment and Inflation expectationTame
•  10/30 10:30am ET Dallas Fed September Manufacturing Activity SurveyTame
• 10/31 8:30am ET 3Q23 Employment Cost IndexMixed
•  10/31 9am ET August S&P CoreLogic CS home priceMixed
•  10/31 10am ET October Conference Board Consumer ConfidenceTame

Key incoming data September

•  9/1 8:30am ET August Jobs ReportTame
•  9/1 10am ET August ISM ManufacturingTame
•  9/6 10am ET August ISM ServicesMixed
•  9/6 2pm ET Fed releases Beige BookTame
•  9/8 9am ET Manheim Used Vehicle Index August FinalTame
•  9/8 2Q23 Fed Flow of Funds ReportTame
•   9/13 8:30am ET August CPIMixed
•  9/14 8:30am ET August PPITame
•  9/15 8:30am ET September Empire Manufacturing SurveyTame
•  9/15 10am ET U. Mich. September prelim 1-yr inflationTame
•  9/18 8:30am ET September New York Fed Business Activity SurveyTame
•  9/18 10am ET September NAHB Housing Market IndexTame
•  9/19 9am ET Manheim September Mid-Month Used Vehicle Value IndexMixed
•  9/20 2pm ET September FOMC rates decisionMarket saw Hawkish
•  9/21 8:30am ET September Philly Fed Business Outlook SurveyMixed
•  9/22 9:45am ET S&P Global PMI September Prelim
•  9/25 10:30am ET Dallas Fed September Manufacturing Activity Survey
•  9/26 9am ET July S&P CoreLogic CS home price
•  9/26 10am ET September Conference Board Consumer Confidence

Key incoming data August

• 8/1 10am ET July ISM ManufacturingTame
• 8/1 10am ET JOLTS Job Openings JunTame
• 8/2 8:15am ADP National Employment ReportHot
• 8/3 10am ET July ISM ServicesTame
• 8/4 8:30am ET July Jobs reportTame
• 8/7 11am ET Manheim Used Vehicle Index July FinalTame
• 8/10 8:30am ET July CPITame
• 8/11 8:30am ET July PPITame
• 8/11 10am ET U. Mich. July prelim 1-yr inflation Tame
• 8/11 Atlanta Fed Wage Tracker JulyTame
• 8/15 8:30am ET Aug Empire Manufacturing SurveyMixed 
• 8/15 10am ET Aug NAHB Housing Market IndexTame
• 8/16 8:30am ET Aug New York Fed Business Activity SurveyNeutral
• 8/16 2pm ET FOMC MinutesMixed 
• 8/17 8:30am ET Aug Philly Fed Business Outlook SurveyPositive
• 8/17 Manheim Aug Mid-Month Used Vehicle Value IndexTame
• 8/23 9:45am ET S&P Global PMI Aug PrelimWeak
• 8/25 10am ET Aug Final U Mich 1-yr inflationMixed
• 8/28 10:30am ET Dallas Fed Aug Manufacturing Activity SurveyTame
• 8/29 9am ET June S&P CoreLogic CS home priceTame
• 8/29 10am ET Aug Conference Board Consumer ConfidenceTame
• 8/29 10 am ET Jul JOLTSTame
• 8/31 8:30am ET July PCETame

Key incoming data July

• 7/3 10am ET June ISM ManufacturingTame
• 7/6 8:15am ADP National Employment Report Hot
• 7/6 10am ET June ISM ServicesTame
• 7/6 10 am ET May JOLTSTame
• 7/7 8:30am ET June Jobs reportMixed
• 7/10 11am ET Manheim Used Vehicle Index June FinalTame
• 7/12 8:30am ET June CPITame
• 7/13 8:30am ET June PPITame
• 7/13 Atlanta Fed Wage Tracker JuneTame
• 7/14 10am ET U. Mich. June prelim 1-yr inflationMixed
• 7/17 8:30am July Empire Manufacturing Survey
• 7/18 8:30am July New York Fed Business Activity Survey
• 7/18 10am July NAHB Housing Market Indexin-line
• 7/18 Manheim July Mid-Month Used Vehicle Value IndexTame
• 7/25 9am ET May S&P CoreLogic CS home priceTame
• 7/25 10am ET July Conference Board Consumer ConfidenceTame
• 7/26 2pm ET July FOMC rates decisionTame
• 7/28 8:30am ET June PCE Tame
• 7/28 8:30am ET 2Q ECI Employment Cost Index Tame
• 7/28 10am ET July Final U Mich 1-yr inflation Tame

Key data from June

• 6/1 10am ET May ISM ManufacturingTame
• 6/2 8:30am ET May Jobs reportTame
• 6/5 10am ET May ISM ServicesTame
• 6/7 Manheim Used Vehicle Value Index MayTame
• 6/9 Atlanta Fed Wage Tracker AprilTame
• 6/13 8:30am ET May CPITame
• 6/14 8:30am ET May PPITame
• 6/14 2pm ET April FOMC rates decisionTame
• 6/16 10am ET U. Mich. May prelim 1-yr inflationTame
• 6/27 9am ET April S&P CoreLogic CS home priceTame
• 6/27 10am ET June Conference Board Consumer ConfidenceTame
• 6/30 8:30am ET May PCETame
• 6/30 10am ET June Final U Mich 1-yr inflationTame

Key data from May

• 5/1 10am ET April ISM Manufacturing (PMIs turn up)Positive inflection
• 5/2 10am ET Mar JOLTSSofter than consensus
• 5/3 10am ET April ISM ServicesTame
• 5/3 2pm Fed May FOMC rates decisionDovish
• 5/5 8:30am ET April Jobs reportTame
• 5/5 Manheim Used Vehicle Value Index AprilTame
• 5/8 2pm ET April 2023 Senior Loan Officer Opinion SurveyBetter than feared
• 5/10 8:30am ET April CPITame
• 5/11 8:30am ET April PPITame
• 5/12 10am ET U. Mich. April prelim 1-yr inflation Tame
• 5/12 Atlanta Fed Wage Tracker April Tame
• 5/24 2pm ET May FOMC minutesDovish
• 5/26 8:30am ET PCE April Tame
• 5/26 10am ET U. Mich. April final 1-yr inflation Tame
• 5/31 10am ET JOLTS April job openings

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