Weekly Commentary - January 26, 2024

Hello readers,

After a few weeks break, we are resuming our weekly commentary. As expected, Stock Market has been performing very well since October (especially the Tech sector). The performance of major markets during the last week, last month and the last year are as follows:

1 Week YTD 1 Year

S&P 500 +1.06% +2.54% +20.15%

Nasdaq 100 +0.29% +5.24% +53.81%

Nasdaq Composite +0.94% +2.96% +32.99%

Dow Jones Industrial +0.65% +1.11% +12.16%

Russell 2000 +1.75% +-2.40% +3.50%

Stock market kept rising with both the Dow Jones and S&P 500 hitting new record highs last week. After a very strong last quarter of 2023, the Russell 2000 is trying to consolidate and could show more weakness during the next couple of weeks. Earnings season is in full swing with all eyes on Fed to look for hints on their future direction (market is expecting several rate cuts in the year 2024). Wednesday could be a crucial day to set a short-term tone for market direction. With market at its highs, any surprise could easily deter further buying and profit taking could kick in resulting in swing lows. Therefore, investors need to be cautious and nimble on taking fresh positions.

It is also important to note that besides bears predicting a recession for sometimes, US is experiencing a strong GDP growth and falling inflation which market sensed several months ago. The real GDP growth was registered at 3.3% during the 4th quarter of 2023 while the annualized core inflation rate dropped to 2%. However, a strong economy could act Fed to avoid rate-cutting which could be a trigger to initiate a short-term sell-off.

Performance of recently mentioned stocks:

Performance of some of the stocks mentioned during our last three month commentaries is as follows.

Symbol 5 Days Perf 1 Month Perf 3 Month Perf 6 Month Perf 52 Week Perf

AAPL 0.45% -0.33% 15.30% -1.07% 33.66%

ABBV -0.23% 6.33% 13.22% 15.86% 11.53%

AMZN 2.38% 3.72% 33.08% 24.17% 60.37%

COST -1.18% 1.82% 25.43% 21.32% 37.84%

CVX 4.63% -2.15% -3.63% -7.56% -20.58%

DDOG -5.13% 0.32% 53.56% 12.03% 63.09%

DT 0.62% 4.32% 32.11% 8.51% 51.80%

GE 1.05% 2.92% 20.58% 14.36% 61.68%

GOOGL 3.81% 7.54% 24.46% 17.73% 56.06%

META 2.71% 11.08% 36.69% 32.01% 167.58%

MSFT 1.30% 7.81% 23.19% 19.59% 62.87%

NET -1.46% -6.51% 44.39% 21.97% 61.91%

NVDA 2.52% 23.85% 51.34% 34.28% 208.21%

NVO 1.03% 5.25% 13.52% 36.56% 57.15%

RAMP 0.10% 6.54% 45.26% 45.62% 56.02%

REVG 3.22% -3.48% 21.25% 38.27% 34.55%

ROST 2.91% 3.47% 24.04% 24.92% 17.44%

TNK 2.40% 17.16% 25.16% 50.50% 112.28%

TW -0.12% 8.06% 11.32% 31.09% 30.13%

As shown above, almost all the stocks mentioned during last 3 and six months have performed really well. Our long-term picks Microsoft and Nvidia have also beaten the markets handsomely. Chevron could be an exception but it is consolidating and being a long-term value, we are expecting good results from it in the long run, not to mention its high dividend yield (4.2%) as a separate bonus.

Actionable Stocks:

MSFT: Microsoft continued its march and obtained the title of most valuable company in the world surpassing Apple. It remains a long-term hold and buy but with earnings due on Tuesday and prices at historically highest levels, this could be a time to take a pause and consolidate. It will remain on our radar for a fresh buy point.

WFRD: An energy player WFRD has dodged the recent down turn in Energy sector which even has curtailed performance of big shots like Chevron and Exxon. WFRD is expected to continue its rise and is actionable as per our TR indicator on these prices.

Income Generators:

We continue to prefer both Chevron (CVX) and ABBV (Abbvie). Chevron is a long-term leader currently being offered at good prices. In our opinion, Market has shredded it recently on its Hess acquisition. Nevertheless, stock seems to be well positioned to resume its growth trajectory. A high dividend yield is a bonus.

ABBV: As mentioned in our last commentary, ABBV has performed in line with our expectations. Again a high dividend yield player.

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