The
S
&
P
500
broke
past
5,000
for
the
first
time
ever
this
week,
but
investors
will
see
if
the
momentum
can
stick
in
the
week
ahead
with
more
inflation
data
and
earnings
results
on
deck.
The
5,000
milestone
does
not
represent
technical
resistance
for
the
S
&
P
500,
but
a
nice,
round
number
has
held
psychological
significance
for
investors
in
the
past
—
and
could
represent
a
level
at
which
stocks
can
further
rally
or
consolidate
from
here.
The
broader
index
first
crossed
4,000
in
April
2021.
The
debate
over
whether
stocks
continue
their
record-breaking
move
or
break
down
is
a
point
of
contention
for
investors.
Some
expect
an
expanding,
albeit
slowing,
economy
will
continue
to
power
earnings
growth
and
drive
stock
prices
higher.
But
others
worry
the
milestone
is
a
reason
to
be
more
cautious
and
advise
traders
to
use
the
occasion
to
take
some
profits,
especially
in
what
appear
to
be
richly
valued
mega-cap
tech
stocks.
Worrying
signals
they
cite
include
rising
bond
yields,
with
the
10-year
Treasury
yield
ticking
higher
to
4.17%
this
week.
Wharton
Business
School’s
Jeremy
Siegel
told
CNBC’s
“Closing
Bell”
on
Thursday:
“Remember,
when
we
think
about
5,000,
it
wasn’t
long
ago
when
we
had
some
very
big
names
telling
us
the
S
&
P
was
going
down
to
3,600.”
“Stocks,
for
the
long
run,
there’s
going
to
be
volatility.
I
don’t
advise
playing
the
game
of
being
a
short-run
trader,
I
know
a
lot
of
people
do,”
Siegel
continued.
“But
I
don’t
think
right
now
the
market
is
overvalued
for
a
long-term
investor
by
any
means.”
.SPX
YTD
mountain
S
&
P
500
But
Karim
El
Nokali,
investment
strategist
at
Schroders,
said
investors
should
proceed
with
caution:
“Usually,
when
the
market
sees
those
big
round
numbers
—
sometimes
the
first
time
it
encounters
those
numbers
—
you
see
a
bit
of
a
retracement.”
On
Friday,
all
three
major
averages
registered
for
their
fifth
straight
week
of
gains,
and
their
14th
winning
week
in
15.
Better
data
supports
the
bull
case
The
recent
optimism
in
markets
can
be
traced
to
a
combination
of
better-than-expected
earnings
results,
as
well
as
signs
of
easing
inflation,
a
stronger
labor
market
and
a
more
resilient
economy
—
all
of
which
are
pointing
to
a
more
rosy
outlook
than
many
anticipated
heading
into
2024.
Thus
far,
roughly
two-thirds
of
S
&
P
500
companies
have
reported
fourth-quarter
earnings,
and
the
results
are
showing
signs
of
strength
after
a
lackluster
start
to
the
season.
FactSet
data
shows
S
&
P
500
earnings
are
tracking
to
have
risen
2.8%
in
the
fourth
quarter,
which
would
be
a
second
straight
quarter
of
earnings
growth,
and
some
expect
that
positive
momentum
will
remain
intact
in
the
weeks
ahead.
“What
we’re
seeing
is
companies
have
done
a
really
great
job
preserving
their
profit
margins.
And
we’ve
actually
seen
even
a
little
bit
of
an
acceleration
or
re-acceleration
again,
in
some
of
the
profit
margins
and
that’s
been
encouraging
for
us
to
see
on
the
earnings
front,”
said
Tony
Welch,
chief
investment
officer
at
SignatureFD.
More
big
earnings
results
in
the
week
ahead
include
Arista
Networks
,
as
well
as
Marriott
International
,
Occidental
Petroleum
,
Deere
and
Applied
Materials
.
Wall
Street
gets
more
inflation
data
next
week,
and
investors
expect
it
will
continue
to
confirm
the
recent
downward
trend.
In
fact,
on
Friday,
stocks
rose
after
December’s
inflation
reading
was
revised
even
lower
than
previously
reported.
January’s
consumer
price
index
is
due
out
Tuesday,
with
prices
anticipated
to
have
risen
0.2%
for
the
month,
and
increased
2.9%
on
a
year-over-year
basis,
according
to
a
Dow
Jones
consensus
estimate.
That
would
be
about
in
line,
or
lower,
from
readings
of
0.2%
and
3.4%
the
prior
month.
A
cooler-than-expected
print
has
the
potential
to
be
greeted
with
enthusiasm,
sending
the
S
&
P
500
even
higher.
However,
a
hotter
print
could
throw
cold
water
on
the
Wall
Street
rally
by
sending
Treasury
yields
higher.
But
SignatureFD’s
Welch
expects
the
bull
market
will
continue
in
2024,
and
predicts
any
market
weakness
will
be
“benign.”
He
recommends
traders
add
to
small
cap
stocks,
which
he
expects
will
outperform
later
in
the
year.
“Our
anticipation
is
that
the
bull
will
continue
throughout
the
duration
of
2024.
Just
like
any
year,
there’s
going
to
be
volatility
and
corrections
along
the
way,
but
those
should,
in
our
view,
those
should
remain
benign
in
2024,”
Welch
said.
“So
if
you
do
get
any
market
weakness,
that
is
an
opportunity
to
add
exposure
if
you
haven’t
already.”
A
‘thin
and
thinning
rally’
Others
worry
the
divergence
between
mega-caps
and
the
rest
of
the
market
is
starting
to
look
untenable,
and
points
to
a
drawdown
in
the
near
term.
The
S
&
P
500
is
up
by
5%
this
year,
with
Nvidia
higher
by
more
than
45%.
This
week,
semiconductor
designer
Arm
Holdings
surged
more
than
60%
after
reporting
strong
earnings
and
making
a
rosy
profit
forecast.
On
the
other
hand,
the
equal-weighted
S
&
P
500,
which
gives
the
same
value
to
each
stock
in
the
index
regardless
of
their
market
capitalization,
is
higher
by
just
0.5%
in
2024.
And
the
small-cap
Russell
2000
index
of
small
cap
stocks
is
lower
by
nearly
1%
this
year.
“Small
caps
have
given
up
all
their
outperformance
for
the
fourth
quarter,
and
we’re
back
to
what
we
had
for
most
of
2023,
particularly
in
the
summertime,
which
is
a
thin
and
thinning
rally
here
as
the
S
&
P
moves
higher,”
Jason
Hunter,
head
of
technical
strategy
at
JPMorgan,
told
CNBC’s
“Closing
Bell”
on
Thursday.
“So
it’s
something
that’s
been
able
to,
as
we
just
said
in
a
note,
defy
gravity
here,
despite
the
lack
of
market
breadth
and
the
repeated
attempts
for
it
to
try
and
roll
over,
but
it
certainly
isn’t
a
broad
breadth
and
broadening
rally
at
this
point,”
he
added.
“In
our
view,
it’s
something
that
makes
it
look
like
the
trend
is
getting
long
in
the
tooth
and
setting
up
at
least
for
a
near-term
pullback.”
That
said,
Hunter
said
the
market
trend
remains
toward
the
upside,
so
long
as
the
S
&
P
500
does
not
break
below
support
levels
at
4,800.
“Our
view
is
that
we
don’t
quite
reach
5,100
and
5,200
area,
that
we
are
going
we
stall
out
below
that,”
Hunter
said.
Other
concerns
abound,
including
greater
geopolitical
risks,
political
tensions
in
a
U.S.
election
year,
as
well
as
a
flare-up
in
concern
around
regional
banks
.
This
month,
New
York
Community
Bancorp
shares
dropped
more
than
25%
after
the
Long
Island
bank
reported
a
surprising
fourth-quarter
loss,
a
large
loan
loss
reserve
and
slashed
its
dividend.
Many
investors
expect
the
concerns
are
largely
contained
to
NYCB
.
However,
with
investors
just
a
little
more
than
one
month
into
2024,
many
investors
are
seeking
more
clarity
to
see
how
the
economy
and
earnings
hold
up,
and
how
the
Federal
Reserve
will
act,
before
making
a
call
on
how
stocks
continue
to
perform.
“I
don’t
think
we’re
leaning
too
heavily
in
any
direction
right
now,”
said
Matt
Kishlansky,
principal
at
GenTrust.
“This
seems
like
a
very
coiled
moment
in
either
direction.”
Week
ahead
calendar
All
times
ET.
Monday
Feb.
12,
2024
2
p.m.
Treasury
Budget
(January)
Earnings:
Arista
Networks
,
Waste
Management
Tuesday
Feb.
13,
2024
6
a.m.
NFIB
Small
Business
Index
(January)
8:30
a.m.
CPI
(January)
Earnings:
MGM
Resorts
International
,
Airbnb
,
Welltower
,
Akamai
Technologies,
Marriott
International
,
Howmet
Aerospace
,
Molson
Coors
Beverage
,
Coca-Cola
Co.,
Hasbro
,
Ecolab
,
Biogen
Wednesday
Feb.
14,
2024
Earnings:
Occidental
Petroleum
,
Albemarle
,
Kraft
Heinz
,
Generac
Thursday
Feb.
15,
2024
8:30
a.m.
Continuing
Jobless
Claims
(02/03)
8:30
a.m.
Export
Price
Index
(January)
8:30
a.m.
Import
Price
Index
(January)
8:30
a.m.
Initial
Claims
(02/10)
8:30
a.m.
Empire
State
Index
(February)
8:30
a.m.
Philadelphia
Fed
Index
(February)
8:30
a.m.
Retail
Sales
(January)
9:15
a.m.
Capacity
Utilization
(January)
9:15
a.m.
Industrial
Production
(January)
9:15
a.m.
Manufacturing
Production
(January)
10
a.m.
Business
Inventories
(December)
10
a.m.
NAHB
Housing
Market
Index
(February)
Earnings:
Deere
,
Applied
Materials
Friday
Feb.
16,
2024
8:30
a.m.
Building
Permits
preliminary
(January)
8:30
a.m.
Housing
Starts
(January)
8:30
a.m.
PPI
(January)
10
a.m.
Michigan
Sentiment
preliminary
(February)