Daily Market Notes: 1-25-2023

In a day that began with a series of phony quotes both up and down in several important stocks that were mostly rescinded, the major indices opened sharply “lower” because of this and then did their usual thing of improving after the morning’s confusion.

For instance, the Dow was “lower” by more than 300 points before climbing back to unchanged at 11am and then kept going to the upside with CAT, BA, UNH and TRV (earnings) leading the way. As a result, it ended higher by 104 up to 33,733.

The S&P also got clocked on the phony opening to down more than 30 points before also recovering but could never get going into positive territory and ended nominally lower with a 3 point decline down to 4017. The Nasdaq lagged for a change and finished with a closing loss of 30 down to 11,334 hurt by selling in AMZN, GOOG on some regulatory issues and ADBE.

The Russell 2000 Index of small stocks drifted a bit lower as well with a 5 point loss to 1885 while the VIX got down to 19.20 which puts it right near that support level and is one of the reasons that things are starting out lower today.

The main focus this week will be on earnings and there were some major ones and a huge one last night.

Stocks have been volatile as investors try to get a better sense of how inflation is affecting the economy, the potential for a recession and whether the Federal Reserve can ease up on its aggressive interest rate increases.

The latest batch of earnings show that companies continue to struggle with the effects of inflation on consumers and supply chains, as for instance Post-it notes and industrial coatings maker 3M got clocked for the biggest drop among S&P stocks after reporting weak fourth-quarter earnings and announcing job cuts. It is the latest company to announce layoffs as consumers get squeezed by inflation and worries grow about a bigger pullback in spending and a possible recession.

UNP also did poorly after reporting disappointing earnings and revenue.

Markets have been swinging between hope and caution as investors watch to see if the Fed will adjust its inflation-fighting strategy. The central bank has already pushed the federal funds rate up to a range of 4.25% to 4.5% from virtually zero early last year.

The Fed will announce its next rate increase a week from today and investors expect a 25 basis point raise, which would mark a softening of the central bank’s pace.

Long-term bond yields fell with the 10-year Note at 3.46% from 3.52% late Monday.

This week sees the largest number of S&P companies reporting earnings for the fourth-quarter so we will just list them day by day: yesterday: Dow components 3M, JNJ lower and TRV, VZ higher in addition to DHI, GE, LMT, RTX while UNP was lower; today – Dow components MSFT and BA lower in addition to TXN, KMB, NEE while T, COF, and FCX are higher; tonight – LVS, LRCX, TSLA, TER, CSX and Dow component IBM.

Economic reports will have: yesterday: December L.E.I. fell by 1%; Thursday – weekly jobless claims,  December durable goods orders, December new home sales, first estimate of 4Q G.D.P.; Friday – December personal income and spending, final U. of Michigan January  Consumer Sentiment Survey.

Donald M. Selkin

Chief Market Strategist


 Don Selkin is the Chief Market Strategist at Newbridge Securities Corporation, member FINRA/SIPC and provides the Fair Value analysis for CNBC each morning. The commentary provided in this Market Letter is intended to provide our current or potential customers with timely market analysis and should not be considered a research report. This Market Letter may contain, and is limited to: Discussions of broad based indices; Commentaries on economic, political or market conditions; Technical analysis concerning the demand and supply for a sector, index or industry based in trading volume and price; Statistical summaries of multiple companies’ financial data, including listings of current ratings; and, recommendations regarding increasing or decreasing holdings in particular industries or securities. This Market Letter does not make a financial or investment recommendation or otherwise promotes a product or service of the firm. This Market Letter contains only news, facts, and commentary on information previously reported from a news source believed to be accurate and reliable by the author. These news sources include the following: {Bloomberg Financial, Reuters, and Associated Press}. It is possible that at any given point in time, the author, Newbridge Securities, or one or more of its employees or registered individuals associated with Newbridge Securities, may hold a position, either long, or short, as well as options, bonds or other instruments in the companies mentioned in this report.