Benzinga - by Shanthi Rexaline, Benzinga Editor.
The positive sentiment appears to have carried forward into the new week, as major index futures all point to a higher opening on Monday. Earnings could exert a significant influence on stocks and the market this week, overshadowing economic data. Tesla, Inc. (NASDAQ:TSLA), Intel Corp. (NASDAQ:INTC), and Netflix, Inc. (NASDAQ:NFLX) are among the key companies set to release earnings reports, likely capturing investors’ attention.
Traders will receive data on the central bank’s preferred inflation gauge, specifically the Personal Consumption Expenditure (PCE) Index, on Friday. This number could be crucial as it is expected to shape investor expectations regarding the upcoming rate decision on Jan. 31.
Cues From Last Week's Trading:
Stocks closed the holiday-shortened week ending Jan. 19 on a positive note. Traders overcame early-week jitters caused by some Federal Reserve officials and economic data that dampened hopes of rate cuts. Taiwan Semiconductor Manufacturing Company Limited’s (NYSE:TSM) strong outlook attracted buyers back into the market on Thursday. This positive sentiment drove the S&P 500 Index to a record high in Friday’s session.
LPL Financial Chief Global Strategist Quincy Krosby noted, “As technology, semiconductors, and consumer discretionary led the S&P 500 to new highs, it reflected the strength of the growth sectors that underpinned the inherent strength in the bull market that was born earlier last year.”
US Index Performance In Week Ended Jan. 19
| Index | Performance (+/-) | Value |
| Nasdaq Composite | +2.26% | 15,310.97 |
| S&P 500 Index | +1.17% | 4,839.81 |
| Dow Industrials | +0.72% | 37,863.80 |
| Russell 2000 | -0.34% | 1,944.39 |
Analyst Color:
John Lynch, Chief Investment Strategist at Comerica Wealth Management, brought up the possibility for a “double-top” to ensue. Double-top is a bearish technical reversal pattern that is formed after a financial asset tops out at the same level two consecutive times.
“Yet we look for the combination of expanded liquidity, 8.0% earnings growth, and declining inflation-adjusted or "real" interest rates to support higher market multiples as the year progresses,” Lynch said.
“We continue to believe the S&P 500 would be fairly valued in the 5,200 range by yearend.”
Amid the S&P 500’s record close, Carson Group’s Ryan Detrick pointed to a historical pattern that bodes well for the market outlook. Friday’s record close came after the S&P 500 Index went without a high for more than 24 months, he noted. This has happened 13 times since 1957, he said.
In these years, returns have been above average and the average gain has been 11.8%, Detrick said, adding the market was higher 12 of these 13 times.
First new all-time high for the S&P 500 in more than 24 months.Since 1957 (when moved to 500 stocks), I found 13 times went >yr without a new ATH and then made one.
Good news for