Good morning contrarians! Welcome to the Daily Contrarian, our morning look at events likely to move markets in the day ahead. Today is Friday, Jan. 19, 2024. The Bottom Line segment of today’s podcast starts at (3:44) for listeners who want to skip ahead.
State of Play
Stocks advanced yesterday for the first time in what feels like awhile. Tech was the big winner as the Nasdaq gained >1% on the back of Taiwan Semiconductor Manufacturing (TSM 0.00%↑) earnings. As we look at our board of indicators at 0640, it looks like this trend is poised to continue:
Stock index futures are pointing to gains, led by tech again. The Nasdaq is up 0.7%. S&P 500 futures are 0.4% to the good;
Commodities aren’t doing anything. WTI crude oil is unchanged trading around $74/barrel. Copper is up 0.8%;
Cryptos are down a bit. Bitcoin is off 2.5% to trade around $41,500. That makes for a somewhat atypical disconnect between cryptos and tech;
Bonds are unchanged. The 2-year yields 4.36%. The 10-year yield is 4.14%.
Earnings
Schlumberger (SLB 0.00%↑), Travelers (TRV 0.00%↑), Ally Financial (ALLY 0.00%↑), Fifth Third Bancorp (FITB 0.00%↑), State Street (STT 0.00%↑), and Regions Financial (RF 0.00%↑) are the main names to report before the open at 0930. So oilfield services and a bunch of financials.
Economic Data
The University of Michigan’s consumer sentiment survey is out at 1000. There are two of these each month: the first one (which is this one), which is closely watched by investors, and the second which basically confirms what was in the first and is therefore not worth anybody’s time. But today is the first reading, also known as the flash reading (though maybe that’s just for PMIs).
The overall reading is expected to come in at an even 70.0 after a 69.7 print last month. There are also segments on consumer expectations, current conditions, and inflation expectations. Probably more important than the numbers are the sentiments expressed by survey respondents, but the overall reading is the only one that has an economist estimate.
The Bottom Line©️
The rebound in tech means the resumption of the narrative that AI will change everything. Watch for that in the coming days to see if it has staying power. If so, it stands to reason that tech will continue to trend higher. Potentially that kind of move could ultimately make for a powerful bull market.
This is still not the time for The Contrarian to get long tech. His investing career’s origins in the late 90s dot-com bubble taught some hard lessons. That has likely made him overly cautious when it comes to all things tech — especially ‘the next great thing’ narratives. The fact is, there are few fundamentals and ‘margins of safety’ when it comes to tech investing. The whole thing appears to live and die on momentum — and hype.
Have a great weekend, everybody! Back here on Monday.
Housekeeping
Obviously this is not investment advice (duh). Do your own research, make your own decisions.
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Earnings, Michigan Consumer Sentiment