Stock Market Today: January 15th - 19th, 2024

Top of the morning StonkForumers! Happy Hump Day to all of you and welcome to the new trading day and a frrrrrrrrrrrresh start. Here is a quick check on those futures as we are under an hour into the US cash market open.

GLTA on this Wednesday, January the 17th, 2024!

 

Morning Lineup - 1/17/24 - Busy Economic Calendar
Wed, Jan 17, 2024

It's not a pretty morning for risk assets as Asian stocks, specifically China, were down sharply overnight, and Europe is down sharply this morning after ECB President Lagarde followed the lead of US central bankers when she noted that rate cuts aren't likely to start until the Summer and UK inflation came in higher than expected. Here in the US, it's a busy day of economic data. Retail Sales and Import Prices were just released, and they both came in higher than expected. On the docket, we have Industrial Production and Capacity Utilization at 9:15 and then Business Inventories and Homebuilder Sentiment at 10 AM.

When comments like the above are made today, the people making them are often written off by the mainstream as candidates being on the fringe, but President Dwight D. Eisenhower made the statement above as part of a nationally televised farewell speech from the Oval Office when his approval rating was just under 60%. Eisenhower’s concerns stemmed from the fact that after multiple major wars, the US defense industry was becoming a much larger share and player within the US economy, and he was pointing out that as its size grew, so too would its influence.

During Eisenhower’s last year in office (1960), total US defense spending, according to the World Bank, was $47 billion. Within 16 years, defense spending had doubled, and just six years later, it had more than doubled again to over $220 billion. Under Reagan, spending steadily increased and reached a short-term peak in 1990 at $325 billion. For the remainder of George H. Bush’s term through most of Clinton’s entire time in office, total spending actually drifted lower but then surged exponentially after 9/11. Spending then generally declined for most of Obama’s time in office and then ramped back up again after Trump came into office (“When I took over our military, we didn’t have ammunition”). As of 2022, the latest year of available figures, total defense spending in the US reached $877 billion, or more than 18 times the level during Eisenhower’s last year in office.



While it may look as though defense spending has only become a larger influence on the US economy since Eisenhower left the Oval Office for the last time, when measured as a percent of GDP, defense spending has generally been on the decline. During Eisenhower’s last year in office, total defense spending equaled about 9% of GDP, and through the decades steadily declined to a low of 3.09% of GDP in 1999 during Clinton’s second to last year in office. Again, spending ballooned as a percent of GDP during George W Bush’s Presidency after the 9/11 attacks, but then started to decline again after Obama came into office. While total dollar-spending surged after Trump came into office, as a share of the economy, the increase looks much more subdued.



In terms of the current US geo-political picture, it’s hard to remember a time when more fires were smoldering around the world, so you would think that it would be a great time for defense contractors. Based on the performance of the largest US defense contractors over the last year, though, that has hardly been the case. The chart below shows the one-year performance of the five largest defense contractors (market cap greater than $50 billion), and during that time, TransDigm (TDG) is the only one that is outperforming the S&P 500. Of the remaining four, two are up less than 4% while Boeing (BA) is down over 5% and RTX is down over 13%. BA is facing its own issues as the company tries to get its act together, but for the other companies rising geo-political instability hasn’t necessarily been good for their stocks.

 

Here is a final look at today's market and futures maps, as well as how each sector performed individually at the close on Wednesday, January 17th, 2024.

 

haha, looks like i got it back up and functioning again

we'll see how long it takes this time until it breaks down again (hopefully not!)

the bot posting the pre-market movers is nice for these instances when i'm really swamped with work like this week again. really hoping it's fixed for good this go around cause i likely won't have time to throw them up again this week unfortunately.

hope you guys are all having a great kickoff to your week and year so far!

i'm still not fully back to monitoring things regularly or trading yet but hopefully soon.

 

btw guys, here is an updated view of EW's monthly ER calendar for the next 5 weeks out. busy calendar! earnings season is here in full swing now. looks like the only notable one that hasn't yet officially scheduled earnings is AMZN according to EW.

 

Top of the morning StonkForumers! Happy Thursday to all of you and welcome to the new trading day and a frrrrrrrrrrrresh start. Here is a quick check on those futures as we are under an hour into the US cash market open.

GLTA on this Thursday, January the 18th, 2024!

 

Morning Lineup - 1/18/24 - Strong Data
Thu, Jan 18, 2024

It's looking like a much more positive start to the day than many others recently as the S&P 500 is indicated to open up by about half a percent, and the Nasdaq is looking at a 1% gain. A strong batch of economic data has put a little bit of a damper on things as rates ticked higher, but outside of the Dow where a large decline in UnitedHealth (UNH) is weighing in the index, the start of the trading day at least looks to be positive.

As far as the economic data is concerned, both Building Permits and Housing Starts came in better than expected, initial jobless claims dropped to 187K for the lowest reading since last January, continuing claims also beat, and even though the Philly Fed report was weaker than expected (-10.6 vs -6.5 expected), it wasn't near the disaster that the Empire Manufacturing report was earlier in the week.

Anyone who was expecting a continued broadening out of the market in 2024 has been majorly disappointed by how the year has started. Eleven trading days into the year, the cap-weighted S&P 500 has declined 0.64%, but the equal-weighted version of the index is down much more with a decline of 2.55%. That puts the performance spread between the two indices at 1.91 percentage points and represents the widest performance gap eleven trading days into the year in favor of the market cap weighted index since at least 1990.

It may sound hard to believe, but this year’s outperformance on the part of the market cap weighted index ends a streak of three years where the equal weighted index outperformed the cap weighted index at the year's outset. In two of those three years, the trend reversed for the remainder of the year as the cap weighted index outperformed the equal weighted index, including last year where the gap in favor of the cap weighted index was the second highest of any year since 1990 trailing only 1998. Looking more broadly, in the 34 years since 1990, the direction of the performance gap between the cap weighted versus the equal weighted index eleven trading days into the year continued in the same direction for the remainder of the year less than 60% of the time. In other words, it’s hardly set in stone that just because the cap weighted index came out of the year strong this year doesn’t necessarily mean it will continue for the remainder of the year.

 

Here is a final look at today's market and futures maps, as well as how each sector performed individually at the close on Thursday, January 18th, 2024.

 

Top of the morning StonkForumers! Happy Friday to all of you and welcome to the final trading day of the week and a frrrrrrrrrrrresh start. Here is a quick check on those futures as we are under an hour from the US cash market open.

GLTA on this Friday, January the 19th, 2024!