(VOLATILITY LIKELY IN THE NEXT TWO WEEKS AFTER CHINESE NEW YEAR ENDS)
February 26, 2024
Hello everyone,
We are in the final week of February. Corporate earnings are winding down. But there will be plenty of economic data being released this week to keep us on our toes. One to watch will be the January personal consumption expenditure report after the consumer price and producer price reports earlier this month came in hotter than expected.
Week ahead calendar
Monday, February 26, 2024
8 a.m. Building Permits final (January)
10 a.m. New Home Sales (January)
10:30 a.m. Dallas Fed Index (February)
Japan Inflation Rate
Previous: 2.6%
Time: 6:30 pm ET
Earnings: Fidelity National Information Services, Domino’s Pizza
Tuesday, February 27, 2024
8:30 a.m. Durable Orders (January)
9 a.m. FHFA Home Price Index (December)
9 a.m. S&P/Case -Shiller comp.20 HPI (December)
10 a.m. Consumer Confidence (February)
10 a.m. Ri9chmond Fed Index (February)
Earnings: eBay, First Solar, ExtraSpace Storage, Axon Enterprise, Norwegian Cruise, Line Holdings, J.M. Smucker, AutoZone, Lowe’s
Wednesday, February 28, 2024
8:30 a.m. GDP Chain Price second preliminary (Q4)
8:30 a.m. Wholesale Inventories SA preliminary (January)
1:45 p.m. New York Federal Reserve Bank President and CEO John Williams keynote remarks in an event LIA Regional Economic Briefing, New York.
Earnings: HP, Monster Beverage, Salesforce, TJX Cos, Paramount Global.
Thursday, February 29, 2024
8:30 a.m. Continuing Jobless Claims (02/17)
8:30 a.m. Initial Claims (02/24)
8:30 a.m. PCE Deflator (January)
8:30 a.m. Personal Consumption Expenditure (January)
8:30 a.m. Personal Income (January)
9:45 a.m. Chicago PMI (February)
10 a.m. Pending Home Sales Index (January)
11 a.m. Kansas City Fed Manufacturing Index (February)
8:10 p.m. New York Federal Reserve Bank President and CEO John Williams moderated a discussion in an event at Citizens Budget Commission 92nd Annual Gala, New York.
Earnings: Hewlett Packard Enterprise, Autodesk, Best Buy, Bath & Body Works,
Hormel Foods.
Friday, March 1, 2024
9:45 a.m. Markit PMI Manufacturing final (February)
10 a.m. Construction Spending (January)
10 a.m. ISM Manufacturing (February)
10 a.m. Michigan Sentiment final (February)
Euro Area Inflation Rate
Previous: 2.8%
Time: 5:00 am ET
Prediction:
Over the next two weeks volatility returns to the market.
VIX- should break out to the upside.
Markets should correct to the downside.
Crude oil may rise as markets correct.
Bitcoin continues to rise.
Nasdaq- We reached 18,000 and capitulation hit. A reasonable possibility is for tech to fall toward the 200-day MA at around 16,000. First targets are 17,501, and then 16,678.
The U.S.$ will continue to rise for a while – the yen will weaken, and the Euro will fall.
As the U.S.$ goes up Gold will have one more downside push. This is the time to accumulate your one- and two-year out of the money LEAPS in Gold and Silver stocks and even Platinum. Keep averaging in. Gold could fall towards the 1960 -1952 target area.
The peak is coming in the U.S.$. Then we will go to long currencies.
Home Depot and Walmart are stocks to watch as they will show how much disposable income people have in the U.S. If we see data showing less disposable income it will be an early sign of things to come a year from now. Visa and Mastercard are also worth watching.
Warren Buffett’s annual letter has been released. The first without his long-time partner, Charlie Munger, who passed away last November at the age of 99.
Here are three takeaways from that letter to his shareholders.
1/ Quality
“We want to own either all or a portion of businesses that enjoy good economics that are fundamental and enduring.
Always buy low.
Some of Buffett’s portfolio stocks include Apple, Bank of America, Coca-Cola, and Chevron.
2/ Invest long
“When you find a truly wonderful business, stick with it. Patience pays, and one wonderful business can offset the many mediocre decisions that are inevitable.”
3/ The bigger picture
Buffett’s flagship business, the freight rail giant BNSF is facing earnings headwind, a crunch in margins, and rising costs.
“Rail is essential to America’s economic future. It is clearly the most efficient way – measured by cost, fuel usage, and carbon intensity – of moving heavy materials to distant destinations. Trucking wins for short hauls, but many goods that Americans need must travel to customers many hundreds or even several thousand miles away.
Buffett notes that “a century from now BNSF will continue to be a major asset of the country and Berkshire.”
Cheers,
Jacquie