Market Wrap
Narratives
Unfortunately, the pandemic necessitated policy accommodation at the expense of exacerbating a number of undesirable side effects - Jonathan Golub, Credit Suisse
Week Ahead
All eyes turn to the Federal Reserve's meeting minutes next week, as well as the US jobs report due Friday, which will probably point to a further slowdown in the labor market recovery. Other key releases include US ISM PMI surveys and foreign trade; UK monetary indicators; Eurozone retail sales, industrial output, and inflation rate; China Caixin PMI surveys; Japan consumer confidence; Singapore Q1 GDP figures; and worldwide manufacturing and services PMI surveys.
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Earnings
There are 10,361 ratings on stocks in the S&P 500. With the end of year approaching there are 53.6% are Buy ratings, 39.6% are Hold ratings, and 6.8% are Sell ratings. It is interesting to note that analysts are more optimistic on S&P 500 stocks today compared to the start of the 2020 (before the impact of COVID-19). On December 31, 50.6% of ratings on S&P 500 stocks were "Buy" ratings, compared to 53.6% today. Nine sectors have a higher percentage of Buy ratings today compared to the start of the year, led by the Utilities (to 51% from 42%) and Consumer Staples (to 47% from 39%) sectors. On the other hand, just two sectors have a lower percentage of Buy ratings today compared to the start of the year: Communication Services (to 55% from 60%) and Energy (to 62% from 66%) - FactSet
Metric | This Week | Prior Week | Change | Comments |
---|---|---|---|---|
Forward 12-mo Estimate | 159.02 | 159.01 | 0.010000000000019327 | |
Earnings Yield | 4.29 | 4.29 | 0 | |
Forward 12-mo PE | 22 | 23.3 | -1.3000000000000007 | |
2y Combined Average Growth Rate % | 3 | 3 | 0 |
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S&P 500 Futures
Bull vs Bear
Bulls will seek to maintain value above last week's breakaway gap, and ideally above the weekly pullback low, 3714.50. Incomplete auction high and strong position of close increases the odds of further upside - even if preceded by back and filling.
Bears will seek to contain momentum and ideally break and hold below 3738.25 on a closing basis. A Secondary Test of the Pullback LO (Confluence: WMID, WIBL, WHI.3 3714.50 -0.91%) and ideally breaking 3700 (-1.3%) would signal further downside potential.
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Indicators
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