January 13, 2025

Markets:

Stock futures slipped Monday as key tech shares that have led the bull market continued to be dumped by investors.

Palantir and Nvidia, two of the bull market leaders popular with retail investors, shed around 3% each in premarket trading to build upon their losses from last week. Nvidia fell nearly 6% during the period, while Palantir lost 11%. Other popular tech shares including Tesla, Broadcom, and Micron were also down in premarket trading.

Surging bond yields have been one of the catalysts for the sell-off in growth-oriented shares. The 10-year Treasury yield on Monday touched the highest since late 2023.

A better-than expected jobs report on Friday spiked yields and sent stocks reeling by casting doubt on further interest rate cuts by the Federal Reserve. The Dow lost 697 points on Friday. The 30-stock Dow and S&P 500 both ended the week 1.9% lower, while the Nasdaq Composite lost 2.3%. All three are now in the red for the young year.

Investors are hoping the start of the fourth-quarter earnings season with stabilize markets. Banks including Citigroup, Goldman Sachs and JPMorgan Chase report on Wednesday, while Morgan Stanley and Bank of America
will post results on Thursday.

Data this week includes the December consumer price index on Wednesday morning. Before that, investors will parse wholesale inflation with December’s producer price index report on Tuesday.

Asia markets fell Monday as traders assessed a stronger-than-expected U.S. jobs report, which could support a slower rate cycle out of the U.S. Federal Reserve.

Portfolio:

We enter this monster week holding setups in SERV, INDI, and TSLL. Earning season is set to begin this week and we cannot wait to begin to receive these reports and their outlooks.

Busy week ahead, let's highlight what's important to us and then proceed:

Economic Indicators to Watch:

Monday (1/13): Treasury Budget.

Tuesday (1/14): Producer Price Index (PPI).

Wednesday (1/15): Consumer Price Index (CPI), Empire State Manufacturing Index, MBA Mortgage Applications, EIA Crude Oil Inventories.

Thursday (1/16): Business Inventories, Retail Sales, Initial Jobless Claims, Philadelphia Fed Index, NAHB Housing Market Index.

Friday (1/17): Housing Starts, Building Permits, Capacity Utilization, Industrial Production.

Earnings Season Begins:

Major bank earnings (JPM, GS, C) will offer insights into credit conditions, loan demand, and the impact of tighter financial conditions on corporate performance. Also, Taiwan Semiconductor (TSM) on Thursday is vital for semi's and tech.

The S&P 500 is at a technical crossroads, hovering near its 100-day SMA:
Key Level to Watch: 5,890.

QQQ lost a big daily closing level of support last week around $514. Pushing down into July 2024 price level highs – $503. RSI remains in neutral territory.
Below $503 are 3 levels of significance to watch:

S1: $500
S2: $495
S3: $487

Ideally for any sort of quick bounce / reversal trade a quick move to the downside needs to take place.

The market is at a pivotal juncture, with inflation data and the kickoff of Q4 earnings likely to dictate the next move. Rising bond yields and weak breadth suggest caution, but resilience in the U.S. consumer and strong labor market data offer selective opportunities.

Now, here is the most import piece of data I will provide you this morning: ES weekly stochastic the lowest point since Oct 2023 lows. Get cash ready! Your opportunity to go n a buying spree will begin soon.

Stay patient and be ready.  I hope this premarket helps!