- GRIT
- Posts
- 👉 The Investing Week Ahead: Energy & Davos
👉 The Investing Week Ahead: Energy & Davos
Middle East chaos could impact oil...
Welcome to your new week.
Before we jump in — our spotlighted chart today comes from MarketWatch:
Essentially the chart above illustrates a bearish market in 2024. 70 years of history shows us we shouldn’t expect a rally in the markets after a persistent yield curve inversion. Only time will tell.
“On average, equity markets ‘bottomed’ about 20% below where they were when the curve first went into inversion. The range of outcomes would be consistent with the S&P 500 having more than 20% downside from the recent market highs…
In short, those who are ‘doubling down’ on the soft landing/ongoing bull market call now are making a wager on an unprecedented occurrence.”
— Michael Darda, Chief Economist & Market Strategist at Roth MKM
Merely food for thought as you shake off the holiday weekend — let’s run through the week!
Key Earnings Announcements:
Goldman and Morgan Stanley are in focus.
Tuesday (1/16): Goldman Sachs, Interactive Brokers, Morgan Stanley, Pinnacle, PNC, Progress Software
Wednesday (1/17): Alcoa, Charles Schwab, Citizens Financial Group, Discover, H.B. Fuller, Kinder Morgan, Prologis, Synovus Financial, U.S. Bancorp
Thursday (1/18): Fastenal, First Horizon Corp, First National Bank, J.B. Hunt, M&T Bank, PPG Industries, Texas Capital Bank, Truist, TSMC,
Friday (1/19): Ally Financial, Comerica, Fifth Third Bank, Huntington, Regions, Schlumberger, State Street, Travelers
What We’re Watching:
Doing things a bit differently this week — we are sharing two companies that already reported early this morning. The next Week in Review post will break down the biggest movers of the week excluding GS and MS.
Investor Events / Global Affairs:
Energy stocks could be at a pivotal moment and the WEF annual conference returns.
Eyes on Energy
The recent stock market rally has left energy shares behind — with the energy sector experiencing a -3% decline since late October, contrasting with the S&P 500's +16% surge during the same period.
The energy sector's challenges are attributed to a significant downturn in oil prices — which are down more than -20% since late September.
Energy bulls are hopeful that upcoming earnings reports and rising geopolitical tensions, such as the recent events in the Red Sea, could spark a rebound for the energy group.
Despite historically cheap valuations, energy is expected to post the worst full-year earnings performance in 2023, but a modest increase is anticipated in 2024.
As tensions remain high in the Middle East — specifically in our proxy war with Iran — we have no choice but to pay attention to energy stocks like $SLB, $MPC, $COP, $CVX, $XOM, and more.
World Economic Forum — Davos Conference
The annual Davos Conference has returned. This is the week when the rich and powerful flock to the World Economic Forum’s (WEF) annual conference in Davos, Switzerland.
“This year, more than 60 heads of state, including Israeli President Isaac Herzog, Ukrainian President Volodymyr Zelensky, French President Emmanuel Macron and China’s second-in-command Li Qiang, will be in attendance. The United States is also sending Secretary of State Antony Blinken, National Security Adviser Jake Sullivan and Special Presidential Envoy for Climate John Kerry.
Business executives include Microsoft CEO Satya Nadella, OpenAI CEO Sam Altman, JPMorgan Chase CEO Jamie Dimon, Bank of America CEO Brian Moynihan and BlackRock CEO Larry Fink, to name a few.” — Nicole Goodkind, CNN
Littered with controversy — the WEF is often considered the new “One World Order” that is challenging U.S. supremacy. However, we’re not here to tell you how to think about this powerful body — which was founded by Klaus Schwab in 1971.
Perhaps most interesting of all — let’s see what comes out of the WEF conference regarding elections. More voters than ever around the world will be heading to the ballot boxes this year.
Major Economic Events:
Retail Sales and Housing have our attention.
Tuesday (1/16): Empire State Manufacturing Survey, Speech by Fed Gov. Waller
Wednesday (1/17): Business Inventories, Capacity Utilization, Fed Beige Book, Import Price Index, Industrial Production, Retail Sales, Speeches by Fed Gov. Bowman and Fed Vice Chair Barr
Thursday (1/18): Building Permits, Housing Starts, Philadelphia Manufacturing Survey, Speech by Atlanta Fed President Bostic
Friday (1/19): Consumer Sentiment, Existing Home Sales, Speech by SF Fed President Daly and Fed Vice Chair Barr
What We’re Watching:
November’s retail sales (reported in December) came in with a +0.3% increase — matching the highest estimates. December’s retail sales (reported this week) are expected to climb +0.4%. If there’s a disappointment from the end of the holiday season — analysts believe it could be indicative that retail sales will trend down throughout Q1.
Existing home sales are at their lowest levels in well over a decade. Building permits and housing starts are relatively healthy from a historical standpoint — but may not be moving quickly enough. We’ll revisit the week’s results in our next post!
If you’re starting your investing journey or are interested in buying T-bills yielding 5% or more, consider visiting Public.com.
Disclaimer: This is not financial advice or recommendation for any investment. The content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.
Reply