A Market Romance: S&P Flirts With Record, Musk Tangos With Stargate, Donald Has Davos Date
Also, let's chart Amazon to a ... breakout?
You're reading 0 of 1 free page.
Register to read more or Unlock Pro — 50% Off Ends Soon
The S&P 500 kissed record territory on Wednesday. Ahh, twas a fleeting moment, as the level could not be held into the close and equity index futures have moved lower overnight. A non-believer might note that Treasury yields bottomed on Inauguration Day and have inched ever so slightly higher ever since. Heck, yields have moved all the way back to levels not seen since last Friday. The beauty of high-speed keyword-reading algorithmic trading. Oh yeah.
All you need is a little movement. It won't take much to create a little momentum. Just a couple of days after U.S. stocks rallied because "The Donald" had not made any tariff-related news on his first day in office, but had alluded to Feb. 1 as a fateful day, futures markets have sold off overnight. Why? Supposedly, because the markets are uncertain about the impacts of the new president's plans for his tariff policy. Yeah. Maybe ... maybe not. Maybe the kids writing these headlines for what used to pass for major newspapers just don't know and are not permitted to say they don't know.
After all, at least part of this week's rally had been due to the launch of the ($100 billion upfront, eventually $500 billion) AI-infrastructure-focused "Stargate" project, right? It's also true that on Thursday, Tesla TSLA, SpaceX, and X honcho Elon Musk, who is also a Trump ally and running the new "DOGE" department, sort of threw cold water on the idea. After the announcement was made, Musk posted (tweeted) on X, "They don't actually have the money" and "Softbank has well under $10B secured. I have that on good authority."
The truth? Who really knows. We do know that Musk and Sam Altman of OpenAI who is a big part of the Stargate program are not best pals and that Musk in addition to all of his other businesses, has also launched his own AI start-up, "xAI", which at least as of now, has not been publicized as being part of this new project. In response to Musk's doubt, Altman invited Musk to visit the program's first site and Microsoft MSFT CEO Satya Nadella stated, "All I know is I'm good for my $80B."
In Addition...
Readers should know that the U.K. Competition and Markets Authority has announced that the agency is opening dual investigations into both Apple AAPL and Alphabet GOOGL to assess their mobile ecosystems to determine whether these environments are in violation of the U.K.'s new digital competition rules. This ecosystem environment includes their companies' mobile operating systems, app stores, and mobile internet browsers. FYI, I am currently flat Apple, as I had said I would be.
On top of that, President Trump has apparently warned Russian President Vladimir Putin that the time had come to enter into negotiations and end the war in Ukraine. or else face new sanctions that would impact Russia and nations doing business with Russia. Look for the large defense contractors to outperform a possibly weak Thursday morning tape. Northrop Grumman NOC has been a leader overnight.
Davos Date
Just when you thought there was no reason to pay attention to what's going on this week at the World Economic Forum at Davos, the winter shindig will take on a sudden significance, provided by someone not even there. President Trump will speak virtually, via satellite, to the crowd at Davos at 11 a.m. ET this morning. Trump is expected to join a dialogue that will include WEF founder Klaus Schwab, and WEF President Borge Brende, and will likely take questions from Blackstone BX CEO Stephen Schwarzman and Bank of America BAC CEO Brian Moynihan. This will be the event of the day, outside of stock-specific earnings news.
Marketplace
Despite strong headline performance, U.S. equities did not do as well as advertised on Wednesday. While the Nasdaq Composite ran 1.28% and the S&P 500 gained 0.61% for the session, the Dow Transports, Russell 2000, S&P Midcap 400, and KBW Banks all closed in the red. Just two of the 11 S&P sector SPDR ETFs ended Wednesday in the green, and those were the two "growth" sectors, Technology XLK and Communication Services XLC. Those two funds gained 2.26% and 1% respectively on the Stargate AI infrastructure news. Energy XLE had another lousy day as did the most interest rate sensitive sector funds... the Utilities XLU and the REITs XLRE.
The breadth was just as sloppy as was sector performance distribution. Losers beat winners by about 2 to 1 at the NYSE and by a rough 7 to 5 at the Nasdaq. Advancing volume took just a 32.6% share of composite NYSE-listed trade, but a much more impressive 56.6% share of composite Nasdaq-listed activity. On top of that, aggregate trading volume ebbed noticeably on a day over day basis for names domiciled at both exchanges. Bottom line? Wednesday's activity rally wasn't all that consequential.
Both the S&P 500 and Nasdaq Composite have added to their respective cushions after retaking their 50-day simple moving averages. This morning's profit taking won't upset the apple cart that is the recently confirmed uptrend for U.S. large caps. That said, President Trump's appearance later this morning will draw the attention of the marketplace and especially those pesky keyword-reading algorithms, whose "traders" don't care one bit about direction. All they want and will try to create is momentum and then, of course, inefficiency through overshoot.
Amazon Breakout?
Amazon AMZN is working on breaking out from an ascending triangle pattern, which is a bullish pattern of continuance.
The upside pivot is $234. That puts the target at roughly $269. Readers will see a more bullish posturing of the stock's daily Moving Average Convergence Divergence indicator as well as a stronger Relative Strength Index reading.
Economics (All Times Eastern)
08:30 - Initial Jobless Claims (Weekly): Expecting 219K, Last 217K.
08:30 - Continuing Claims (Weekly): Last 1.859M.
10:30 - Natural Gas Inventories (Weekly): Last -258B cf.
11:00 - Oil Inventories (Weekly): Last -1.961M.
11:00 - Gasoline Stocks (Weekly): Last +5.852M.
The Fed (All Times Eastern)
Fed Blackout Period.
Today's Earnings Highlights (Consensus EPS Expectations)
Before the Open: AAL (.47), FCX (.22), GE (1.04), MKC (.77), UNP (2.79)
After the Close: CSX (.42), TXN (1.23)
At the time of publication, Guilfoyle was long GE, MSFT, NOC, AMZN equity.
