by Ben Weiss, for the Call to Leap Team
With mostly positive earnings season in the rear-view mirror, who's ready for the big game this weekend? I'm not even that big of an NFL fan, but I know I'll be keeping my eye out for some great commercials from my favorite companies to invest in (looking at you, Apple Vision Pro). Reportely, tickets to the game itself are averaging $10,000 a pop—I definitely don't like football that much 😉
Let's take a look at what happened this week and what's coming up...
The market this week
We saw lots of green on the market this week with the S&P 500 notching yet again another record high, closing above $5000 for the first time ever. The market seemed to broadly react well to major tech earnings announcements over the past few weeks and continued on its upward march. By the numbers, S&P 500 (+1.40%), the Dow Jones (+0.32%), Nasdaq (+2.41%), Russell 2000 (+2.96%) all finished well in the green, with many of the usual mega-cap suspects posting gains. NVDA and pharmaceutical company Eli Lilly (LLY) took the cake with some of the largest gains. NVDA continues its meteoric rise which kicked off around New Year's, while LLY posted solid earnings results and guidance driven largely by the sudden popularity of its weight-loss drug.
Did you know?...Ever wonder why the popular S&P 500 index ETF is called "SPY"? The ticker symbol alludes to the term "SPDR", or "Standards & Poor's Depositary Receipt". SPY was the first US ETF to be listed on a national stock exchange back in 1993 and has since grown to be the most traded ETF globally. That's why I love to invest with the best!
In the news
Last week, the Fed indicated they may push the start of interest rate cuts further out in the year, well past the March 2024 start date that many investors were previously anticipating. It's important to remember though that the Fed has shown a history of acting thoughtfully and cautiously to guide the economy in the best direction possible. Chairman Jerome Powell reminded everyone simply, "This is a good economy" and that we are making good progress combating inflation.
That lukewarm news on interest rates was nicely outweighed by encouraging data on job growth and inflation reduction. The US government revised its already-low December inflation numbers downward from 0.3% to 0.2% of increase. This extra good news combined with solid overall earnings season results saw the "bulls" win out this week pushing the market higher.
Weight loss, capital gains...Major drug manufacturer Eli Lilly (LLY) saw its stock price jump about 12% up this week following news of huge revenue from its popular weight-loss and diabetes drug Mounjaro/Zepbound (two drug names with same active ingredient). Since being approved by the Food & Drug Administration (FDA) last year, the drug contributed to LLY exceeding expectations for earnings per share (EPS) by 8.5% and revenue by 4.6% with a year-over-year (YoY) revenue spike of 28%.
In related news, pharmaceutical company Novo Nordisk (NVO), who manufactures the competing weight-loss drugs Ozempic and Wegovy, said it will buy drug company Catelent for over $16 billion to better compete against LLY.
The Mouse is in the house...Disney (DIS) also had a big jump this week following their largely positive earnings announcement. The stock price gapped up nearly 12% following news that the company beat EPS expectations by 22% and an announced 50% boost to their quarterly dividend. Reported revenue came in just shy of expectations by about -1%, coupled with mixed subscriber numbers on Disney+ (decreased) and Hulu (increased). The company also continues its cost-cutting campaign spurred by major layoffs about a year ago.
SPY
On the charts for both SPY and QQQ here, you'll see two sets of channel lines (orange and green). In both cases, I see a more-macro upward trend dating back to early 2023, however recently I've observed a secondary, steeper breakout trend that I wanted to point out as well. Do you agree with how I drew my lines or do you see it differently? Let's chat on Discord!
QQQ
Friendly reminders from Steve:
Let your money work harder for you...
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-Ben and Steve
The following article is strictly the opinion of the author and is to not be considered financial/investment advice. Call to Leap LLC and the author of this article do not claim to be a registered financial advisor (RIA) or financial advisor. Please visit our terms of service and privacy policy before reading this article.