January on track for >3% gain, solidifying 2024 to be positive (>92% probability) and suggests our 5,200 target might be low. Array ( [cookie] => 964688-89d396-080ecd-7850ea-9ea42d [current_usage] => 2 [max_usage] => 2 [current_usage_crypto] => 0 [max_usage_crypto] => 2 [lock] => [message] => [error] => [active_member] => 0 [subscriber] => 0 [role] => [visitor_id] => 146343 [reason] => Usage under limits [method] => ) 1 and can accesss 1

VIDEO: Even more important than FOMC or even macro this week is the Wed close.  Jan is on track to be positive and it supports our case for 5200 or even much higher.

Please click below to view our Macro Minute (duration: 4:37).

This week is a critical week given the Treasury announcements, FOMC, critical macro and the heaviest week of 4Q23 EPS season. But arguably the singular most important data point this week will be (Wednesday) today’s S&P 500 close and this needs to be above 4,769. At the moment, the S&P 500 is on track for >+3% YTD gain.

• We previously wrote about how the full year tends to play out in January and investors tend to look at 3 measures. But the key one of all is the January 31 close:
  – Santa clause (last 5 days + 1st 2 days) -0.88%, bad omen
  – Rule of 1st 5 days -0.13% <– we explained why a mulligan
  – Jan gain +3.25%
• That latter one is key. Over past 74 years, when prior year >+15% (n=28) and Jan positive (n=13):
  – Full year return median +16%
  – Full year return is positive 92% of the time
  – only exception was 2018
• In 2018, the Fed was in autopilot tightening mode and was overtightening. This is not the case today, hopefully. Wed FOMC meeting will tell us a lot.
• Tuesday, we got the JOLTS (job openings) and it was >9mm, a negative surprise. But as our charts below show, the JOLTS rise does not sync up with what Indeed.com or Linkup show, so we think there is some statistical aberration there. And thus, we are inclined to give this less weight. But keep in mind, the Fed and Powell cite JOLTS often, so this rise in openings will be viewed as a sign of labor market strength.
• The January FOMC rate decision is released at 2pm ET today.  While nobody expects the Fed to announce a cut, the key is how their language and communication evolves around expected cuts. If inflation is the focus, the Core PCE is already on a trajectory to hit the 2% target this year. In fact, some economists worry we could even undershoot 2% because of the accelerating weakness in autos (17%) and the normalizing of housing (47% of basket).
• So it should make sense for the Fed to shift their views from December. This is a source of potential confusion and anxiety though, as the Fed does need to provide a framework for judging future cuts. We know the Fed has turned dovish. And our view is inflation is weakening. So we see positive developments into YE. 
• But will markets rally today? As long as S&P 500 doesn’t fall 3% on today’s session, the outlook for stocks remains positive into YE.

BOTTOM LINE: Case for a strong 2024 strengthened by positive January close

We remain constructive for 2024 and see >10% gains. If the January barometer is right, the upside to our S&P 500 target is possibly as high as 5,500 or more.

• our base case remains that more gains in 2H2024
• but we could be wrong if the Fed makes a pronounced dovish move
• we are not expecting this
• we expect market breadth to expand, thus we see big oppty in small-caps IWM 0.07%
• we like Financials XLF -0.12%  and Industrials XLI 0.56%  –> ISM key on Thu for XLI 0.56%
• we like Technology/FAANG/Cybersecurity XLK 0.73%  QQQ 0.83%  HACK 0.78%

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36 Granny Shot Ideas and 46 SMID Granny Shot Ideas: We performed our quarterly rebalance on 1/17. Full stock list here -> Click here

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Key incoming data February:

• 2/01 8:30am ET 4QP 2023 Nonfarm Productivity
• 2/01 9:45am ET S&P Global Manufacturing PMI January Final
• 2/01 10am ET January ISM Manufacturing
• 2/02 8:30am ET January Jobs Report 
• 2/02 10am ET: U. Mich. Sentiment and Inflation Expectation January Final
• 2/05 9:45am ET S&P Global Services & Composite PMI January Final
• 2/05 10am ET January ISM Services
• 2/07 9am ET Manheim Used Vehicle Index January Final
• 2/09 CPI Revisions
• 2/13 8:30am ET January CPI 
• 2/14 PPI Revisions
• 2/15 8:30am ET February Empire Manufacturing Survey 
• 2/15 8:30am ET February Philly Fed Business Outlook Survey
• 2/15 8:30am ET January Retail Sales Data
• 2/15 10am EST February NAHB Housing Market Index 
• 2/16 8:30am ET January PPI
• 2/16 8:30am ET February New York Fed Business Activity Survey
• 2/16 10am ET U. Mich. Sentiment and Inflation Expectation February Prelim
• 2/19 9am ET Manheim Used Vehicle Index February Mid-Month
• 2/21 2pm ET January FOMC Meeting Minutes
• 2/22 9:45am ET S&P Global PMI February Prelim 
• 2/26 9:30am ET February Dallas Fed Manufacturing Activity Survey
• 2/27 9am ET February S&P CoreLogic CS home price 
• 2/27 10am ET February Conference Board Consumer Confidence
• 2/28 8:30am ET 4QS 2023 GDP
• 2/29 8:30am ET January PCE

Key incoming data January:

• 1/02 9:45am ET S&P Global Manufacturing PMI December Final Mixed
• 1/03 10am ET December ISM Manufacturing Tame
• 1/03 10am ET JOLTS Job Openings November Tame
• 1/03 2pm ET December FOMC Meeting Minutes Tame
• 1/04 9:45am ET S&P Global Services & Composite PMI December Final Tame
• 1/05 8:30am ET December Jobs Report Mixed
• 1/05 10am ET December ISM Services Tame
• 1/08 9am ET Manheim Used Vehicle Index December Final Tame
• 1/11 8:30am ET December CPI Details Suggest Tame
• 1/12 8:30am ET December PPI Tame
• 1/16 8:30am ET January Empire Manufacturing Survey Tame
• 1/17 8:30am ET January New York Fed Business Activity Survey Tame
• 1/17 8:30am ET December Retail Sales Data Strong
• 1/17 9am ET Manheim Used Vehicle Index January Mid-Month Tame
• 1/17 10am EST January NAHB Housing Market Index Mixed
• 1/18 8:30am ET January Philly Fed Business Outlook Survey Tame
• 1/19 10am ET U. Mich. Sentiment and Inflation Expectation January Prelim Tame
• 1/24 9:45am ET S&P Global PMI January Prelim Mixed
• 1/25 8:30am ET 4QA 2023 GDP Mixed
• 1/26 8:30am ET December PCE Tame
• 1/29 9:30am ET Dallas Fed January Manufacturing Activity Survey Tame
• 1/30 9am ET January S&P CoreLogic CS home price Tame
• 1/30 10am ET January Conference Board Consumer Confidence Tame
• 1/30 10am ET JOLTS Job Openings December Mixed
• 1/31 2pm ET FOMC Rate Decision

Key incoming data December

• 12/01 9:45am ET S&P Global Manufacturing PMI November Final Tame 
• 12/01 10am ET November ISM Manufacturing Strong 
• 12/05 9:45am ET S&P Global Services & Composite PMI November Final Strong 
• 12/05 10am ET JOLTS Job Openings October Tame 
• 12/05 10am ET November ISM Services Strong 
• 12/06 8:30am ET 3QF 2023 Nonfarm Productivity Strong 
• 12/07 9am ET Manheim Used Vehicle Index November Final Tame 
• 12/08 8:30am ET November Jobs Report Tame 
• 12/08 10am ET U. Mich. Sentiment and Inflation Expectation December Prelim Tame 
• 12/12 8:30am ET November CPI Tame 
• 12/13 8:30am ET November PPI Tame
• 12/13 2pm ET FOMC Rate Decision Dovish
• 12/14 8:30am ET November Retail Sales Data Tame
• 12/15 8:30am ET December Empire Manufacturing Survey Tame
• 12/15 9:45am ET S&P Global PMI December Prelim Tame
• 12/18 8:30am ET December New York Fed Business Activity Survey Tame
• 12/18 10am ET December NAHB Housing Market Index Tame
• 12/19 9am ET Manheim Used Vehicle Index December Mid-Month Tame
• 12/20 10am ET December Conference Board Consumer Confidence Tame
• 12/21 8:30am ET 3QT 2023 GDP Mixed
• 12/21 8:30am ET December Philly Fed Business Outlook Survey Mixed
• 12/22 8:30am ET November PCE Tame
• 12/22 10am ET: U. Mich. Sentiment and Inflation Expectation December Final Tame
• 12/26 9am ET December S&P CoreLogic CS home price Tame
• 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 Final Tame 
• 11/01 10am ET JOLTS Job Openings September Mixed
• 11/01 10am ET October ISM Manufacturing Tame
• 11/01 10am ET Treasury 4Q23 Quarterly Refunding Press Conference Tame
• 11/01 2pm ET FOMC Rate Decision Dovish
• 11/02 8:30am ET: 3Q23 Nonfarm Productivity Tame
• 11/03 8:30am ET October Jobs Report Tame
• 11/03 10am ET October ISM Services Mixed
• 11/07 9am ET Manheim Used Vehicle Index October Final Tame
• 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 Data Resilient
• 11/16 8:30am ET November New York Fed Business Activity Survey Tame
• 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-Month Tame
• 11/21 2pm ET Nov FOMC Meeting Minutes Tame
• 11/22 10am ET: U. Mich. November final Sentiment and Inflation Expectation Tame
• 11/24 9:45am ET S&P Global PMI November Prelim Mixed
• 11/27 10:30am ET Dallas Fed November Manufacturing Activity Survey Tame
• 11/28 9am ET November S&P CoreLogic CS home price  Tame
• 11/28 10am ET November Conference Board Consumer Confidence Tame
• 11/29 8:30am ET 3QS 2023 GDP Strong
• 11/29 2pm ET Fed Releases Beige Book Tame
• 11/30 8:30am ET October PCE Tame

Key incoming data October

•  10/2 10am ET September ISM Manufacturing Tame
•  10/3 10am ET JOLTS Job Openings August Hot
•  10/4 10am ET September ISM Services Tame
•  10/6 8:30am ET September Jobs Report Mixed
•  10/6 9am ET Manheim Used Vehicle Index September Final Tame
• 10/10 11am NY Fed Inflation Expectations Mixed
•  10/11 8:30am ET September PPI Mixed
•  10/11 2pm ET Sep FOMC Meeting Minutes Tame
•  10/12 8:30am ET September CPI Mixed
•  10/13 10am ET U. Mich. September prelim 1-yr inflation Mixed
•  10/16 8:30am ET October Empire Manufacturing Survey Tame
•  10/17 8:30am ET October New York Fed Business Activity Survey Tame
• 10/17 8:30am ET September Retail Sales Data Hot
•  10/17 9am ET Manheim October Mid-Month Used Vehicle Value Index Tame
•  10/17 10am ET October NAHB Housing Market Index Tame
• 10/18 8:30am ET September Housing Starts Tame
• 10/18 2pm ET Fed releases Beige Book Tame
•  10/19 8:30am ET October Philly Fed Business Outlook Survey Tame
• 10/19 10am ET Existing Home Sales Tame
• 10/19 12pm ET Fed (including Powell) at Economic Club of New York
•  10/24 9:45am ET S&P Global PMI October Prelim Tame
•  10/26 8:30am ET 3Q 2023 GDP Advance Strong
•  10/27 8:30am ET September PCE Tame
•  10/27 10am ET Oct F UMich Sentiment and Inflation expectation Tame
•  10/30 10:30am ET Dallas Fed September Manufacturing Activity Survey Tame
• 10/31 8:30am ET 3Q23 Employment Cost Index Mixed
•  10/31 9am ET August S&P CoreLogic CS home price Mixed
•  10/31 10am ET October Conference Board Consumer Confidence Tame

Key incoming data September

•  9/1 8:30am ET August Jobs Report Tame
•  9/1 10am ET August ISM Manufacturing Tame
•  9/6 10am ET August ISM Services Mixed
•  9/6 2pm ET Fed releases Beige Book Tame
•  9/8 9am ET Manheim Used Vehicle Index August Final Tame
•  9/8 2Q23 Fed Flow of Funds Report Tame
•   9/13 8:30am ET August CPI Mixed
•  9/14 8:30am ET August PPI Tame
•  9/15 8:30am ET September Empire Manufacturing Survey Tame
•  9/15 10am ET U. Mich. September prelim 1-yr inflation Tame
•  9/18 8:30am ET September New York Fed Business Activity Survey Tame
•  9/18 10am ET September NAHB Housing Market Index Tame
•  9/19 9am ET Manheim September Mid-Month Used Vehicle Value Index Mixed
•  9/20 2pm ET September FOMC rates decision Market saw Hawkish
•  9/21 8:30am ET September Philly Fed Business Outlook Survey Mixed
•  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 Manufacturing Tame
• 8/1 10am ET JOLTS Job Openings Jun Tame
• 8/2 8:15am ADP National Employment Report Hot
• 8/3 10am ET July ISM Services Tame
• 8/4 8:30am ET July Jobs report Tame
• 8/7 11am ET Manheim Used Vehicle Index July Final Tame
• 8/10 8:30am ET July CPI Tame
• 8/11 8:30am ET July PPI Tame
• 8/11 10am ET U. Mich. July prelim 1-yr inflation Tame
• 8/11 Atlanta Fed Wage Tracker July Tame
• 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 Survey Positive
• 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 Survey Tame
• 8/29 9am ET June S&P CoreLogic CS home price Tame
• 8/29 10am ET Aug Conference Board Consumer Confidence Tame
• 8/29 10 am ET Jul JOLTS Tame
• 8/31 8:30am ET July PCE Tame

Key incoming data July

• 7/3 10am ET June ISM Manufacturing Tame
• 7/6 8:15am ADP National Employment Report Hot
• 7/6 10am ET June ISM Services Tame
• 7/6 10 am ET May JOLTS Tame
• 7/7 8:30am ET June Jobs report Mixed
• 7/10 11am ET Manheim Used Vehicle Index June Final Tame
• 7/12 8:30am ET June CPI Tame
• 7/13 8:30am ET June PPI Tame
• 7/13 Atlanta Fed Wage Tracker June Tame
• 7/14 10am ET U. Mich. June prelim 1-yr inflation Mixed
• 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 Index in-line
• 7/18 Manheim July Mid-Month Used Vehicle Value Index Tame
• 7/25 9am ET May S&P CoreLogic CS home price Tame
• 7/25 10am ET July Conference Board Consumer Confidence Tame
• 7/26 2pm ET July FOMC rates decision Tame
• 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 Manufacturing Tame
• 6/2 8:30am ET May Jobs report Tame
• 6/5 10am ET May ISM Services Tame
• 6/7 Manheim Used Vehicle Value Index May Tame
• 6/9 Atlanta Fed Wage Tracker April Tame
• 6/13 8:30am ET May CPI Tame
• 6/14 8:30am ET May PPI Tame
• 6/14 2pm ET April FOMC rates decision Tame
• 6/16 10am ET U. Mich. May prelim 1-yr inflation Tame
• 6/27 9am ET April S&P CoreLogic CS home price Tame
• 6/27 10am ET June Conference Board Consumer Confidence Tame
• 6/30 8:30am ET May PCE Tame
• 6/30 10am ET June Final U Mich 1-yr inflation Tame

Key data from May

• 5/1 10am ET April ISM Manufacturing (PMIs turn up) Positive inflection
• 5/2 10am ET Mar JOLTS Softer than consensus
• 5/3 10am ET April ISM Services Tame
• 5/3 2pm Fed May FOMC rates decision Dovish
• 5/5 8:30am ET April Jobs report Tame
• 5/5 Manheim Used Vehicle Value Index April Tame
• 5/8 2pm ET April 2023 Senior Loan Officer Opinion Survey Better than feared
• 5/10 8:30am ET April CPI Tame
• 5/11 8:30am ET April PPI Tame
• 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 minutes Dovish
• 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