Chip Stocks May Lead A Stock Market Rebound On Jan. 29

Tuesday, January 29, 2019

  • S&P 500 Future: -2 points
  • The U.S. 10-Year Yields: -0.004 to 2.74%
  • U.S. dollar index: -0.06 to 95.68
  • Oil: +$0.46 to $52.47
  • VIX: +0.14 to 18.99

International Markets

  • Nikkei +0.08% to 20,664.64
  • Hong Kong Hang Seng -0.16% to 27,531.68
  • China Shanghai -0.10% to 2,594.25
  • U.K. FTSE 100 +1.44% to 6847.13
  • German DAX +0.09% to 11,219.95

Key Events:

  1. Global markets continue to look healthy, and that continues to be a positive sign for U.S. equity prices.  UK equities are rising ahead of another Brexit vote. 
  2. The FOMC meeting starts today, and it is widely expected for the Fed not to raise rates. But more important will be the commentary that comes from the meeting. Additionally, the press conference tomorrow will likely show many important points surrounding future rate hikes and the balance sheet run-off.  I will update with more details on of what to precisely listen for tomorrow AM.
  3. Earnings will also continue to be in focus:
    1. Apple and AMD reporting results tonight.
    2. Alibaba, Boeing, AT&T on Wednesday morning
    3. Facebook, Microsoft, Tesla, PayPal and Visa on Wednesday afternoon.

These companies will likely help to either propel markets higher in the days to come or help to sink them.

The stock market is pointing to a flat opening based on the S&P 500 as earnings continue to pour in. The pace of earnings is about to pick up meaningfully this afternoon. There is a very big gap in the S&P 500 which needs to be filled up to around 2,660. It would suggest to me there is a very good chance the S&P 500 rises today to that 2,660 level.

spx, sp500

Is the semiconductor outlook improving?

According to Semi.org, North American Semiconductor Billing Spending increased by almost 8% in December versus November, the first increase in 7 months. Whether it is the start of a new trend higher or just a pause in a steeper decline is the big questions. But when we combine this with the Lam Research results, we can see a glimmer of hope for the semis and global economic pick-up. Chips are used in nearly every aspect of our lives today, so if chips are doing better than it is likely a positive sign the economy is doing better.

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Disclosure: Michael Kramer and the clients of Mott Capital own Apple, Verizon, Microsoft, Tesla

Disclaimer: This article is my opinion and expresses my views. Those views can change at a ...

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