🤑Personal Income & Outlays: “The gain in the core personal consumption expenditures price index, which excludes the more volatile costs of food and energy, slowed to 2.9% year over year in December, according to data released by the Bureau of Economic Analysis…” (Reuters)

🛢️Crude Oil Rally: “Oil prices rose for a second week in a row and settled at their highest in nearly two months on Friday as positive U.S. economic growth and signs of Chinese stimulus boosted demand expectations, while Middle East supply concerns added support.” (Reuters)

💊Big Pharma Patent Cliffs: “Big pharmaceutical companies such as Bristol Myers Squibb, Merck, and Johnson & Johnson face a looming threat that will put tens of billions of dollars in sales at risk between now and 2030, as blockbuster drugs will tumble off a so-called patent cliff." (CNBC)

🏛️Fed Rate Decision: “Federal Reserve policymakers have signaled they won't cut U.S. interest rates just yet; most economists think they will wait until June, given ongoing strength in household spending and uncertainty over the economic outlook.” (Reuters)

👷The January Jobs Report: "The year ended with a strong jobs report for December when 216,000 jobs added raced past estimates of 170,000 new jobs, and followed an unexpected drop in the unemployment rate in November." (Investopedia)

👩‍💻Big Tech Earnings: “Around 86 companies are set to report this week, including a host of tech giants and the market's four biggest stocks: Apple, Microsoft, Google parent Alphabet, and Amazon.” (The Street)

STOCK INDEX FUTURES

Stocks closed mixed but stayed positive for the week as the latest PCE and GDP data added to investor optimism about the U.S. economy. For the week, the S&P 500 finished 1.1% higher, the Nasdaq Composite gained 0.9%, and the Dow Jones Industrials added 0.7%.

The core personal consumption expenditures (PCE) price index - the Federal Reserve's preferred inflation gauge - rose 0.2% M/M in December 2023.

We saw a few corporate earnings warning signs for the market, as electric automaker Tesla's latest sales warning saw it depart the 'Magnificent Seven' of mega-cap stock leaders - shedding 12% and some $80 billion in market cap on Thursday.

Chipmaker Intel was another outlier, plunging 10% on Friday after forecasting revenue for the first quarter that could miss market estimates by more than $2 billion.

INTEREST RATE FUTURES

The Federal Reserve is largely expected to hold its interest rate decision steady and make only subtle changes to the policy. But, Fed Chair Jerome Powell’s press conference will be closely watched for any hawkish or dovish messaging.

The ongoing debate to cut rates is the dominant narrative. The question traders are speculating on is, “How Many Rate Cuts?”

We think the Fed will discuss extensively the merits of cutting interest rates against the risk of future inflation, which has yet to fall to the 2.0% target.

Traders expect the Fed will cut rates in late spring or summer because inflation has declined much faster than the central bank anticipated. Core inflation in the fourth quarter came in significantly lower than they expected just last June.

The Fed’s preferred inflation measure, the personal consumption expenditures price index, rose 0.2% in December from the previous month, the Commerce Department said Friday. That was up from a 0.1% decline in November but still consistent with subdued inflation.

Every Friday afternoon, Topstep Performance Coach John Hoagland fires up his charts and identifies the trends and “areas of importance” futures traders should look out for in the coming week. Read on to see what John’s keeping his eye on this week!

Mick~

The first goal of trading (even before making money) is not to lose money. Capital preservation is paramount. 

Hoag~

Volatility has never been my thing. Holding positions into economic releases has created big wins and big losses. At this point, adding up all the wins and losses, I’m about even, so now I don’t bother!

Robert C.~

Understand that trading is a game of probabilities and risk management. You "speculate" what the market will do, but you can't "control" what the market will do. What you CAN control is how you react to what the market does. And that is called a trading plan.

Eddie.~

Traders are here to trade. They are not here to battle the markets. If you find yourself fighting a market, the odds are you have already put your day in a negative position.