Macrosynthesis

That's a Wrap

The S&P 500 and Nasdaq 100 reached new record highs last week, with the Dow Jones also peaking, as markets reacted to updated CPI data showing ongoing disinflation. Leading stocks such as NVIDIA and Amazon posted gains, while PepsiCo fell after missing revenue forecasts. For the week, the S&P 500, Dow Jones, and Nasdaq recorded increases of 1.4%, 0.32%, and 2.41%, respectively.

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Tech, solar, and semiconductor stocks outperformed other industries, while gold miners, utilities, and consumer staples stocks underperformed the market significantly.

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Over 100 million people are expected to watch the Superbowl today, and many of the world's biggest companies including Pepsi, Volkswagen, Booking, BMW, Morgan Stanley, Intuit, Verizon, Google, and Amazon are all running ads which cost about $7 million per slot.

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China Ramps Up Bank Loans

In January 2024, Chinese banks issued a record CNY 4.92 trillion in new loans, surpassing both last year's record and the expected CNY 4.5 trillion, as part of efforts to stimulate the economy. Household and corporate loans saw significant increases, contributing to a record total social financing of CNY 6.5 trillion, exceeding expectations. However, the growth in broad M2 money supply slowed to its lowest since November 2021, and the increase in outstanding yuan loans was slightly below the previous month's growth.

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Inflation Revised

The US CPI rose 0.2% in December 2023, below the initially reported 0.3%. November's figure was adjusted to 0.2% from 0.1%, and October saw a revision to 0.1% from a flat rate. The core CPI remained unchanged at 0.3% for December and November and 0.2% for October, as the BLS updates its seasonal adjustment factor annually.

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Hold on Now

The recent GDP report, fueled by a $2.7 trillion government deficit, showcased strong numbers but masked underlying economic weaknesses. The fourth quarter's 3.3% GDP growth, significantly above forecasts, was achieved at the cost of increasing national debt, with the federal deficit growing by $1.3 trillion in the past year. This spending-driven growth indicates a decrease in real wealth, as government expenditures do not equate to genuine wealth creation.

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Save Our Ship

Trade organizations worldwide are urging governments to support Red Sea security due to Houthi attacks affecting merchant vessels. This call comes as up to 30% of global trade, worth $80 billion, faces delays and added costs due to rerouting. The U.S. Navy, leading Operation Prosperity Guardian with over 20 supporting countries, faces scrutiny amid increasing political concerns and recent U.S. servicemen casualties. The initiative emphasizes the importance of international cooperation for safe maritime commerce, highlighting the significant impact of Red Sea disruptions on global trade and shipping costs (which are up 100%).

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You Shall Not Pass

Senate Republicans blocked a bipartisan bill offering border security and foreign aid, including aid for Ukraine and Israel, after opposition from House Republicans and Donald Trump. Efforts to reach a compromise are ongoing. The bill's failure highlights GOP divisions and the impact of Trump's influence, especially on border issues. The rejection follows the House's failed attempts to impeach Homeland Security Secretary Alejandro Mayorkas and pass a standalone Israel aid bill.

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Commodity Movers

Gasoline

+9.17% (1W Chg)

+16.17% (1M Chg)

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Uranium

+14.59% (1M Chg)

+109.28% (YoY Chg)

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Cocoa

+16.35% (1W Chg)

+38.56% (1M Chg)

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Potatoes

+18.75% (1M Chg)

+28.81% (YoY Chg)

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Noteworthy Events    

Disney

‍Walt Disney surged by 12% Thursday after announcing fiscal first-quarter earnings that exceeded expectations. The company also provided an optimistic outlook for the 2024 fiscal year and announced a 50% increase in its dividend.

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Ralph Lauren

Ralph Lauren surged by 17% Thursday following the company's impressive fiscal third-quarter performance, where it outperformed earnings and revenue forecasts. The company reported $4.17 per share, surpassing the expected $3.54 per share. Additionally, Ralph Lauren achieved $1.93 billion in revenue, exceeding the anticipated $1.87 billion. This financial success was attributed to maintaining healthy inventory levels through the holiday shopping season.

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Paypal

PayPal's stock fell 11% Thursday following its announcement of lower-than-expected earnings guidance for the entire year despite a solid quarterly financial performance. The company forecasted earnings of $5.10 per share, below the anticipated $5.48 per share.

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NYCB

New York Community Bancorp's shares fell by 6.7% Wednesday following Moody's Investors Service downgraded its credit ratings to junk status.

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Palantir

Palantir's stock soared by 30.8% Tuesday following its quarterly revenue announcement of $608.4 million, surpassing the anticipated $602.4 million—the company's financial outlook for 2024 matched analyst forecasts.

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GE Health Care Tech

‍GE HealthCare Technologies experienced a significant jump of 11.7% Tuesday after surpassing earnings expectations in the fourth quarter. The company reported adjusted earnings of $1.18 per share, exceeding the forecasted $1.07 per share. Additionally, its revenue reached $5.21 billion, surpassing the anticipated $5.09 billion.

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Wynn Resorts

Wynn Resorts experienced a 6% increase following their fourth-quarter earnings report, significantly surpassing analyst expectations. The luxury hotel operator announced adjusted earnings of $1.91 per share, exceeding the forecasted $1.15 per share. Furthermore, their quarterly revenue of $1.84 billion outperformed the anticipated $1.74 billion, showcasing the company's strong financial performance.

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CASE STUDY: SYRA +595%

Syra Health was chosen as a subcontractor for a $75 billion contract awarded to Caduceus Healthcare by the U.S. Dept. of Health & Human Services on Feb. 8th 2024. The partnership aims to provide comprehensive care and services, marking Syra's entry into federal contracts and expanding its healthcare solutions from local and state to federal levels, highlighting its commitment to enhancing healthcare delivery and management.

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Following our alert in the Billion Dollar Contract scenario, SYRA opened at around $3.15-- up from the $1.15 range the night before, then surged to the $6.40 range within the first thirty minutes of trading, and dropped back down to the $3.50 range before rebounding to around $8.30 in the late afternoon.

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SYRA closed on Friday at around $3.50, up +229% for the week.

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Stocks like SYRA within the Billion Dollar Contract scenario yield an average one-day return of over +89%.

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Upcoming Catalysts:

EARNINGS

Monday

• Arista Networks (ANET)
• Avis Budget (CAR)
• Blackbaud (BLKB)
• Brighthouse Financial (BHF)
• Cadence Design Systems (CDNS)

Tuesday

• Airbnb (ABNB)
• Shopify (SHOP)
• Upstart (UPST)
• Akamai Technologies (AKAM)
• American International Group (AIG)

Wednesday

• Cisco Systems (CSCO)
• Twilio (TWLO)
• Global Payments (GPN)

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Thursday

• Coinbase Global (COIN)
• DraftKings (DKNG)
• Crocs (CROX)
• DoorDash (DASH)
• Deer (DE)
• Applied Materials (AMAT)

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Friday

• Cinemark (CNK)

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The LevelFields Team