Mid-Morning Look

Thursday, December 28, 2023

U.S. stocks rise to kick of the trading day, looking to make it a 5^th straight day higher for the S&P 500, Russell 2000, and Nasdaq (which is up 14 of last 15 trading days) as we are now on Day 4 of the technical 7-day Santa Rally on Wall Street, which has only resulted (to this point) in more stock market gains as sellers have been non-existent in December. The S&P 500 can set a record today if it closes above 4796.56, a level last seen on Jan. 3, 2022 (yest closing price was 4781.58 – 0.3% below the 2022 record). The Dow Jones Industrial Average notched its sixth record close of the month on Wednesday at 37,656.52. The Nasdaq Composite ended yesterday about 6% below its record close of 16,057.44, set Nov. 19, 2021. And the Russell 2000 SmallCap index came into the day up 14.22% this month alone after underperforming all of 2023 (+17.3% YTD coming in). With two days left to 2023, and most S&P sectors are on pace for big yearly gains, led by Technology (XLK) +55% YTD (boosted by the SOX +66% YTD), Communications (XLC) +51% YTD and Consumer Discretionary (XLY) +40% YTD. Utilities (XLU) are -10% YTD, Consumer Staples (XLP) -3.6% YTD, Energy (XLE) -2.5% YTD and Healthcare (XLV) is flat on the year. Early action same as the first part of the week – little to no Wall Street analyst action, light news, and no Fed/gov’t speakers. Coming into the day: NVDA top S&P performer YTD +238%, followed by META +197%, BLDR +162%, RCL +162%, UBER +162%, CCL +130%, PHM +128%, AMD +125%, PANW +113%, TSLA +112% and AVGO +101% YTD. The biggest S&P index decliners on year are FMC -49% YTD, ENPH -48%, DG -45%, PFE -44%, MRNA -43%, EL -41%, PAYC -33%, AES -32%, VFC -31% and ETSY -31% YTD.

• November Advance Retail Inventories fell (-0.1%) to $794.9B vs -0.1% prior (revised from flat, while on a Y/Y basis, retail inventories grew 5.1% in November. Wholesale Inventories for November (-0.2%) M/M to $895.7B, in-line with consensus and vs. (-0.3%) in October (revised from -0.2%). On a Y/Y basis, wholesale inventories fell (-3.1%).
• International Trade Goods Balance (-$90.3B) vs. (-$88.40B) consensus and (-$89.56B) in October as exports fell to $165.1B vs. $171.3B in October and imports fell to $255.4 vs. $260.9B prior.
• Pending Home sales index for November unchanged, below consensus +1.0% and down (-5.2%) from Nov 2022.