Daily Rundown: January 9

BOB LANG: Good morning, Action Alerts PLUS subscribers. It's Monday, January 9, 2023. Time for our rundown. We've got a lot to cover. It's a big week. So let's go ahead and get started here. So as we begin the week, we notice that the markets are up sharply, close to 1% already after the first half an hour of trading, with really good volume, very brisk action to the upside. This is good follow-through from Friday's strong rally, which was basically NFP-induced.

We had a good Nonfarm Payroll report, which we talked about Friday morning. Good strong job growth and weaker wage growth possibly puts the Fed in position to slow down on the rate hikes later on this year in 2023. We'll have to see a few more data points to find out. But certainly that was one good shoe to drop for the bulls. And later on this week, we'll be watching the CPI, the Consumer Price Index, which falls on Thursday morning.

 Markets are looking for a smaller gain for December versus the November number. So that could also stoke a little bit more buying. But first things first. We have a couple of other items to cover early in the week. We have a Fed speaker coming out later on today, who's still rather hawkish but closer to the neutral side than the hawkish side, that's Raphael Bostic, the Atlanta Fed president.

So he'll be talking a little bit later on today about inflation and where the committee's goals are at. Also we have a couple of warnings already this morning-- and from Lululemon, is one retail name. And of course, Friday evening, right after the market closed, we heard from Macy's, and they took their numbers down. And earlier in the week, actually, late Thursday and early Friday, we heard from McDonald's-- same thing.

So if this becomes a trend, the market is going to have to determine whether this is already priced in and just to take it in stride or else some of these companies and stocks are going to feel more punishment. Of course, today, Lululemon, after their warning there, they were down about 14%, 15%, so a high-priced, high-multiple stock that, you know what, when you're priced for perfection, as a name like Lululemon is, one little hiccup like this is going to really punish your stock.

So going forward, this week, again, we have more Fed speakers coming out on Friday. But the big one is tomorrow. We have Chair Jay Powell is going to be giving a speech at about 9:00 Eastern Time tomorrow. And it's very possible he's going to talk about the nonfarm payroll report and the wages that were a little bit lighter than expected. I don't believe that he's going to set any policy from this talk or this meeting.

I think he's going to pretty much reiterate the committee's goals and objectives to get inflation back down to 2%. So look for that. But certainly, if he sees some clear skies here starting to appear in the economy, I suspect he'll be talking about that but being a little bit more on the cautious side. As far as the economy is concerned, listen, the jobs report and the ISM report that came out last week was-- of course, the jobs report was rather mild.

But the ISM report, which showed some hot numbers in employment but some weak numbers overall in their numbers, seem to be portraying that the economy is heading into a recession. But again, the jobs number is not really portraying that right now.

So I think there's a little diceyness going on here, a little bit of gamesmanship when it comes to whether the data is actually telling us where the economy is going or whether it's fooling us and telling us that, hey, things are good, and there is a potential for a soft landing later on this year.

 So as we look at the markets from a technical standpoint, we notice that the market indicators are starting to move in sync with the rest of the primary market indicators, which is the volume and the price, but also notice that the oscillators are reaching to a level of extreme overbought that certainly warns a little bit of caution is to be had right here.

 So certainly, we've noticed, much like Friday, markets have discounted news and have gone ahead and moved against what the conventional wisdom would have thought for the markets and basically gone against it. So for instance, Friday, with that news of the jobs report, we saw the markets diverge and go upwards but push to a moderately overbought reading.

 So that's something we have to watch for later on this week as some more news comes out, much like the CPI and Powell's speech tomorrow. So just a reminder about Wednesday, Wednesday at noon is going to be our monthly members call. We're going to be talking about our positions. We're going to take some questions from our readers and our subscribers.

 And thank you very much for sending some of those questions in. Please keep them coming. We'll be reading through those and hopefully answering your questions on the air. So that's at noon on January 11th. Don't miss it. We're going to be covering a lot of our positions and what we have in store for 2023. So that's going to be it, everyone. Have a great day. Trade carefully. Walk carefully in this market. It's really tricky. And we'll see you back tomorrow morning. Thanks.