December 18, 2023

(MARKETS ARE OVERBOUGHT AS THEY COUNTDOWN TO YEAREND)

December 18, 2023

Hello everyone,

Calendar for Week Ahead

Monday, Dec. 18

10 a.m. ET NAHB Housing Market Index

Tuesday, Dec. 19

8:30 a.m. Building Permits preliminary (November)

8:30 a.m. Housing Starts (November)

Earnings: FedEx

Wednesday, Dec. 20

8:30 a.m. Current Account (Q3)

10 a.m. Consumer Confidence (December)

10 a.m. Existing Home Sales (November)

Earnings: General Mills, Micron Technology

Thursday, Dec. 21

8:30 a.m. GDP Chain Price final (Q3)

8:30 a.m. GDP (Q3)

8:30 a.m. Initial Claims (12/16)

8:30 a.m. Philadelphia Fed Index (December)

10 a.m. Leading Indicators (November)

Earnings: Nike, CarMax

Friday, Dec. 22

8:30 a.m. Durable Orders preliminary (November)

8:30 a.m. PCE Deflator (November)

8:30 a.m. Personal Consumption Expenditure (November)

8:30 a.m. Personal Income (November)

10 a.m. Michigan Sentiment final (December)

10 a.m. New Home Sales (November)

One week until Christmas. Happy Holidays. If you have family around and go all out on the gift-giving and the food, I wish you well and hope the day is memorable for all the right reasons.

Me. I prefer to go to the beach, take an esky, an umbrella, a beach towel, a good book, and soak up some sun and enjoy the warm ocean water. No stress, no hassle, no family arguments. Just a really chill day.

So, at this time of year, the markets are starting to wind down. We have had a great bull move over the last couple of months, and I hope many of you have made good profits this year.

Stocks last Friday registered their seventh straight week of gains. For the S&P 500, that’s the best winning streak since 2017. For the DOW, it’s the best going back to 2019.

This week coming is expected to be a slower one. With the last Fed meeting of 2023 behind us, we are heading into the holidays with few catalysts. But let’s remember, any indication the Fed may not start to cut rates as they suggested in 2024 could hurt stocks. Just stay mindful of this. It will be several data points during the next several months that ultimately matter.

Some notable earnings to look out for include FedEx on Tuesday and General Mills on Wednesday. Results from retail company Nike are also on deck Thursday and should give investors insight into the state of the consumer, as well as clarity into markets abroad, particularly China.

Most investors expect stocks to continue the rally into the final part of the year in the so-called Santa Clause Rally. In other words, the stretch between Christmas Day – Dec. 25 through to January 2.

The rally is broad, and so is lifting all boats. But we are very overbought.

With this in mind, let’s look at some of the most overbought names in the market right now.

Boeing (BA)

FedEx (FDX)

D.R. Horton (DHI)

Equifax (EFX)

Caterpillar (CAT)

Skyworks Solutions (SWKS)

BA climbed about 8% last week. The company announced leadership appointments over the course of the week with Stephanie Pope chosen as operations chief and Brian Moran as sustainability chief. The stock has soared more than 38% this year. Two out of every three analysts have a buy rating on (BA), however, the average analysts expect shares to slide lower in the next 12 months following recent gains.

Cheers,

Jacquie

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