Stock Market Outlook for Fri Jan 12 2024 – Some Weakness But Higher

Prior Trading Day Summary:

On Thursday investors and analysts were surprised by higher than anticipated CPI numbers which sent stocks lower. But as the day wore on investors decided that perhaps the PPI numbers would not be “as bad”. Some analysts also remarked that the higher CPI numbers simply meant the Fed would have to wait a bit longer to start cutting rates in 2024, perhaps into June. That seemed to build some support and markets moved back up.

The SPX closed down just 3 points to 4780 and the NASDAQ recovered to close flat on the day at 14,970.

It was a remarkable recovery and perhaps partially helped by the start of trading in bitcoin ETFs.

Let’s review Thu Jan 11 2024 closing technical indicators to see what to expect for Fri Jan 12 2024.

Stock Market Outlook: SPX Closing Chart For Thu Jan 11 2024

The index closed above the 21 day and just below the Upper Bollinger Band which is bullish.

The 21 day moving average is rising which is bullish.

The closing candlestick however is bearish for Friday and signals a potential down day.

The 50 day moving average is above the 100 day and still climbing which is bullish.

The 100 and 200 day moving averages are climbing which is bullish. The 200 day is at 4400 on the SPX which is bullish.

The Lower Bollinger Band has moved above the 50 day moving average and with the Upper Bollinger Band dipping lower, the Bollinger Bands Squeeze is underway. Initial signals are for stocks to move higher but as investors know, there are never guarantees in investing.

The S&P chart is bullish for Friday with just one bearish signal, the closing candlestick.

Stock Market Outlook review of Thu Jan 11 2024

Stock Market Outlook: Technical Indicators Review

Stock Market Outlook for Fri Jan 12 2024 

For Friday technical signals primarily bullish with a couple of signals turning a bit bearish. Overall though the outlook remains bullish despite the hotter CPI numbers. On Friday investors get the PPI numbers before the open and just as important, the start of quarterly bank earnings. If the bank earnings fail to meet estimates stocks will pullback on Friday.

If the PPI numbers are stronger than estimates but bank earnings beat estimates, stocks should be able to climb on Friday even after some weakness in the morning.

Potential Economic and Political Market Moving Events

The main economic reports this week are on Thursday when we get the CPI numbers and Friday when the latest PPI numbers are released.

Monday:

3:00 Consumer credit was expected at $8 billion but came in at a stunning $23.7 billion which could be construed as inflationary

Tuesday:

8:30 Trade deficit is expected to come in at -$64.7 billion but came in at -$63.2 billion

Wednesday:

10:00 Wholesale inventories came in as expected at -0.2%

Thursday:

8:30 Weekly Initial Unemployment Insurance Claims are expected to come in at 210,000 but came in lower at 202,000

8:30 CPI for Dec is expected to rise to 0.2% but came in at 0.3%

8:30 Core CPI for Dec was unchanged at 0.3%

8:30 CPI year-over-year is expected to rise slightly to 3.2% but came in at 3.4%

8:30 Core CPI year-over-year is expected to slip from 4.0% to 3.8% but dipped to just 3.9%

2:00 Budget statement for Dec expected to rise to -$75 billion but came in at $129 billion

Friday:

8:30 PPI is expected to rise to 0.1%

8:30 Core PPI is expected to rise to just 0.2%

8:30 Core PPI year-over-year is expected to be unchanged at 2.5%

Before the open – latest quarterly bank earnings are released