Key Takeaways

1. Goldman: Commodity Trading Advisers to Sell Stocks in ‘All Scenarios’;
2. Brent Steady at $80 Amid Global Supply Surplus;
3. Alibaba Surges Over 5% Pre-market, Jack Ma Boosts Stake with $50M: Reports;

I. Market Report

USA stock futures were little changed Tuesday after the Dow Jones Industrial Average surpassed 38,000 for the first time ever.

As of 08:21 am, EST (or 4:21 pm in Riyadh), Dow Jones Industrial Average(DJI.US) futures fell 49 points, or 0.13%. S&P 500 index(SPX.US) futures rose 0.09%, and NASDAQ(IXIC.US) futures rose 0.20%.

II. Flash Headlines

Goldman: Commodity Trading Advisers to Sell Stocks in ‘All Scenarios’

Goldman Sachs warns of potential stock sell-offs by commodity trading advisers (CTAs), who might offload up to $42 billion depending on market trends. CTAs, currently holding $129 billion in long positions, are modeled to sell $10 billion in a rising market or up to $42 billion if stocks decline over the next week. Meanwhile, Nasdaq 100 futures show extended long positioning, with a $3.4 billion increase to about $25 billion, raising concerns for a potential profit-taking pullback.

Bullish Forecast After S&P 500's New High: Truist

The S&P 500's recent record close, following a two-year absence of highs, indicates a potentially bullish year ahead. Historically, in 13 of 14 instances with a year-long gap between record highs, the S&P 500 saw an average 12-month gain of 14%, outperforming its average return. Keith Lerner of Truist highlights this trend, noting the importance of the Fed's role in managing inflation and interest rates to avoid recession. This pattern reflects broader economic performance, despite the unpredictability of short-term market movements.

USA Stocks Rally: January Effect in Play

January 2024 saw USA stocks climb, market analysts attributed the surge to a shift from rate-cut expectations to strong macroeconomic fundamentals. This aligns with the "January Effect," where broad indices typically hit new highs. The S&P 500 historically averages a 1.0% gain in January. Factors like robust employment data and consumer savings indicate potential economic growth exceeding earlier predictions.

Brent Steady at $80 Amid Global Supply Surplus

Brent crude hovered around $80/barrel, unaffected by USA and UK strikes against Yemen's Houthi rebels, as global crude supply remains ample. Despite geopolitical tensions and OPEC's production cut pledges, abundant non-OPEC output and resumed production in Libya and the USA keep oil prices steady.

III. Stocks To Watch

United Airlines Q4 Results Beat Expectations, Up Nearly 7% in Pre-Market Trading

United Continental Holdings, Inc.(UAL.US) reported a 9.9% YoY increase in total revenue for Q4 2023, reaching $13.63 billion, surpassing analyst expectations of $13.54 billion. Net profit was $600 million, a 28.8% decrease compared to the previous year; adjusted earnings per share were $2.00, exceeding analyst expectations of $1.69. The company anticipates a loss in 2024Q1 due to the grounding of Boeing 737 MAX 9 aircraft ordered by the Federal Aviation Administration (FAA). As of 7:07 am ET, United Airlines' pre-market trading on Tuesday increased by approximately 6.8%.

Western Digital Rises After Moving to Top Pick at Morgan Stanley

Western Digital Corporation(WDC.US) stock rose 4% on Monday after it replaced NVIDIA Corporation(NVDA.US) as Morgan Stanley's Top Pick, but the firm remained very positive on Nvidia's prospects as well.

The analysts said that with the strong move in Nvidia in the last month or so, they see more upside potential from Western Digital. Morgan Stanley increased the price target on Western Digital's shares to $73 from $52 and also raised its estimates.

Apple iOS 17.3 Official Release: Introducing Stolen Device Protection Feature

Today, Apple Inc.(AAPL.US) released the official update of iOS 17.3 to iPhone XS and above users, introducing a batch of new features. Among them, the newly added Stolen Device Protection feature enhances the security of iPhone and Apple ID by requiring Face ID or Touch ID (without password fallback) to perform certain operations. A security delay of one hour is required after Face ID or Touch ID verification before executing sensitive operations such as changing device password or Apple ID password, requiring additional successful biometric authentication.

Jack Ma Bolsters Alibaba Stake with $50 Million Purchase

Alibaba Group Holding Ltd. Sponsored ADR(BABA.US)'s co-founder, Jack Ma, and company chairman, Joe Tsai, have recently been increasing their stakes in the company, according to The New York Times. Tsai purchased approximately $151 million worth of Alibaba's U.S.-traded shares in Q4 through his Blue Pool Management family investment vehicle. Meanwhile, Jack Ma, who still holds a significant stake, invested $50 million in Hong Kong-traded stock during the same quarter.

IV. Upcoming Events

Economic Calendar

Earnings Calendar

Know More: The Week Ahead | Key Earnings from Almarai, SADAFCO, and ZAIN; US Reports Lineup Packed with Heavyweights like Microsoft, Tesla, and ASML

Note: All dates provided are estimates or based on company announcements, and are subject to change at any time, whether advanced or delayed.

[This newsletter is written and edited by Bruce from Sahm News Team]