Daily Market Notes: 1-26-2023

In another astounding session yesterday similar to what we have seen so many times lately, the major indices rose from another horrible opening and finished mixed to slightly lower.

For instance, the Dow started the session with an awful 461 point decline and managed to end with a 9 point closing advance. It was led in this process by gains in DIS, MCD and BA, which went from an earnings-related early decline to a positive finish and this helped the Dow to close higher to 33,743. It also got huge help from MSFT which improved from an earnings-related decline of 10 points to a close “only” one point lower, and this price action had a major influence not only on the Dow but also on the S&P and Nasdaq as well.

And talking about a tremendous comeback, the S&P began with a decline of as much as 67 points down and came all the way back to end with a nominal 1 point loss at 4016, so it appears that investors are using these dips to come in and buy at lower levels.

The Nasdaq did the worst, with a 21 point loss down to 11,313 but it also came back from an early decline of 265 also helped by the recovery in MSFT, but was hindered by losses in ADBE and GOOG.

The Russell 2000 Index of small stocks eked out a gain of 4 up to 1890 and the VIX continued to inch lower down to 19.08.

This price action took place against the two main competing ideas hanging over investor’s heads, namely the worries about weakening profits and an economy toiling  under the weight of interest rate hikes by the Federal Reserve. On the other hand there are hopes that the economy can avoid a severe recession and that cooling inflation will get the Fed to take it easier on rates.

MSFT was under pressure after giving a forecast for upcoming results that fell short of  expectations for slowing growth in its Azure cloud business. Companies that use its software in the cloud computing business such as SNOW also fell before cutting their losses as well. And TXN declined also.

T was a stock that did well on better profit than expected as did COF. .

The yield on the 10-year Treasury dipped to 3.44% from 3.46% late Tuesday while the 2-year fell to 4.14% from 4.21%.

This week sees the largest number of S&P companies reporting earnings for the fourth-quarter so we will list them day by day: yesterday: Dow component MSFT lower and  BA higher while TXN, KMB, NEE were down and T, COF, and FCX were up; today – Dow component IBM lower in addition to TER, CSX, NOW, JBLU, MKC, SHW, LUV, TROW, VLO while Dow components CVX, V and LVS, XRX, STX, BX, CMCSA and TSLA are higher; tonight – Dow component INTC.

Economic reports will have: today: weekly jobless claims fell by 6K to 186K,  December durable goods orders rose by 5.6%, December new home sales gained by 2.3% for the highest since August, first estimate of 4Q G.D.P. came in at a gain of 2.9%; 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.