To The Moon

On 13 Jan (Monday) start of the trading week opened with mixed performance results from the market. NASDAQ declined by 0.38% due to the losses in the mega-cap sector. S&P 500 was up by 0.16%, Russell 2000 up by 0.2%, and the Dow Jones Industrial Average up by 0.86%.

Despite a pickup in buying activity in the afternoon, the market sentiment was initially negative, influenced by rising market rates and persistent inflation concerns.

Initially, market breadth favored decliners, with a 3-to-2 margin at the NYSE and a 2-to-1 margin at the Nasdaq. By the close, advancers led decliners by an 11-to-10 margin at the NYSE, while decliners led advancers by a 4-to-3 margin at the Nasdaq.

Significant movements were noted in stocks with specific news:- UnitedHealth (UNH) surged 3.9% to $541.14 after news of a proposed 4.3% increase in Medicare Advantage plan payments. - Moderna (MRNA) fell 16.8% to $35.15 after reducing its FY25 revenue outlook.

Consumer Expectations Survey Intensified Prolonged Inflation Fears

The New York Fed's Survey of Consumer Expectations heightened fears of prolonged inflation. The expectations remained at 3.0% for the one-year horizon and increased to 3.0% from 2.6% for the three-year horizon. The five-year horizon expectations decreased to 2.7% from 2.9%.

December PPI and Core PPI Expected On Tuesday (14 Jan)

We are expecting December NFIB Small Business Optimism at 6:00 ET where the previous stands at 101.7. At 8:30 ET, we are expecting the December PPI where consensus was 0.3% and previous was 0.4% and Core PPI consensus was expected at 0.2% while previous stands at 0.2%.

S&P 500 Energy and Materials Up More Than 2%

Strong performance from energy stocks like Valero (VLO) and Schlumberger (SLB) helped the sector to top the group with 2.25% gain, the other sector with more than 2% gain was materials sector.

$UnitedHealth(UNH)$ surged 3.9% after news of a proposed 4.3% increase in Medicare Advantage plan payments while Moderna (MRNA) fell 16.8% after reducing its FY25 revenue outlook allows Healthcare sector to close with 1.27%.

The financial sector up by 0.69% was helped by good performance from bank stocks ahead of their earnings, with SPDR S&P Bank ETF (KBE) rising by 1.2%.

More than 4% losses from Micron Technology cause the information technology to be down by 0.87%.

Note Yield Is Mixed

The 10-year Treasury yield rose by three basis points to 4.80% while the 2-year Treasury yield remained unchanged at 4.40%.

Stocks To Watch

$NVIDIA(NVDA)$ shares fell 3% after reports surfaced about delays in equipping data centers with its latest AI chip racks. The issues, primarily overheating and connectivity problems with the Blackwell chips, have reportedly led major clients like Microsoft (MSFT), Amazon (AMZN), and Google (GOOGL) to reduce their orders. Despite these challenges, a source close to Google mentioned that their data center plans are proceeding without delays.

$Honeywell(HON)$ saw a 1.8% rise in shares following news of a potential company breakup. Under pressure from activist investor Elliott Investment Management, Honeywell is considering splitting into two separate entities focusing on automation and aerospace/defense. This move, expected to be announced with its Q4 earnings, could significantly boost the company's valuation.

Though we are seeing a rise in HON shares after the news of a potential company breakup, HON is still trading below the short-term MA and MACD is in a downside movement, so we need to see some strength from HON to be trading consistently above the short-term MA.

MTF is giving some uptrend for longer period, but in the short term, HON might faced some challenges before its earnings.

Morgan Stanley increased its price target for $Tesla Motors(TSLA)$ , citing the potential of its robotaxi business as a transformative force. Analysts believe Tesla's unique capabilities in AI and autonomous ridesharing can offset challenges in the EV market, projecting significant growth in its global vehicle fleet by 2030.

TSLA is trading above the short-term MA despite the recent pullback and we could be expecting a bullish MACD crossover coming, and the MTF is giving more uptrend on the longer period.

So we need to see if TSLA can maintain its share price above the short term MA, as we build up to the 20 Jan new trump administration coming into office.

Starbucks (SBUX) is implementing new store policies requiring customers to make a purchase to use the facilities. This change aims to improve store operations and customer experience by reducing congestion and ensuring a welcoming atmosphere. The company is also introducing measures to prevent harassment and other disruptive behaviors.

Arm Holdings (ARM) shares dipped 2.6% amid reports of a potential price hike of up to 300% for its chip designs. This strategy, proposed by CEO Masayoshi Son, aims to significantly boost Arm's revenue over the next decade. The company licenses its technology to major players like Apple (AAPL) and Qualcomm (QCOM).

$Lululemon Athletica(LULU)$ is receiving positive attention following strong holiday sales performance, driven by successful product categories and collaborations. Analysts expect continued growth, particularly in China, where new store openings and strategic initiatives are boosting sales. The company is also benefiting from favorable markdowns compared to last year.

LULU is showing good strength despite the recent pullback by staying traded above the short-term MA, and there is a possible bullish MACD crossover, this would mean more upside movement coming from LULU.

MTF is also giving confidence with strong upward trend for potential upside.

Summary

We could be seeing some small recovery coming from consumer related sectors as investors digest the strong labor data, for the semiconductor and mega cap, we might still need to wait for some time.

I would think market would still be trading in a mixed performance on Tuesday (14 Jan).

Appreciate if you could share your thoughts in the comment section whether you think market would be trading in a small recovery sentiment.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.