Meta results are poised to light up the Nasdaq Composite COMP ahead of key tech earnings
for Thursday. S&P 500 SPX
It also points to gains as investors take a half-hearted look at the Fed meeting.
Worried that investors are in the grip of another Fed misread is Samantha LaDuc, founder of LaDucTrading.com. “The market does not appreciate either a higher terminal rate or a slowdown or decline in growth. One or more of these assumptions are incorrect. My bet. The Fed has been hiking for a long time. They don’t reduce it in 2023, if they don’t have a reason,” he says.
MarketWatch last spoke with LaDuc, who specializes in timing major market breakouts, last May when he predicted the S&P 500 would end 2022 at around 3,800, it ended at 3,859. Another call he made in early 2022 was his warning of a coming “tech crash,” predicting a 20% drop in the Nasdaq in 2022; it ended the year down 33%.
Among us call of the day, LaDuc says the cash should be there and that investors are “being paid to wait. They get a very favorable 4.5% on their sitting cash.”
Although the dollar has lost 8% over the past 12 weeks, “the money you put in money market funds is now earning 4.5%, whereas before it was earning 0.4% or 0.5%,” he said in an interview Wednesday.
“So the Fed’s hike has prompted a sort of paid wait while the market stabilizes. I don’t think Treasuries are a safe bet for this year. I don’t really see any upside in bonds, and I think equities have more downside risk than upside,” LaDuc said.
He’s particularly worried about technology, saying the Nasdaq likely has one leg left before the selloff ends.
He explains that analysts are predicting a decline in earnings until the fourth quarter of 2023, and not an economic recession. “They’re literally expecting Q4 to be around 10% in revenue due to favorable year-over-year comparisons.
“The problem with that is that the earnings analysis doesn’t assume a recession in any way, shape or form, and it absolutely assumes moderate growth,” LaDuc says. “So we still have Goldilocks, all priced in stocks and valued at earnings.”
An increase in value rotation has been a key forecast for LaDuc since July 2020, when he began calling for: “Things on Paper” Anticipating a shift in oversold commodities, cyclicals, and large-cap values plays with lower interest rates.
While that rotation “absolutely outperformed” in both 2021 and 2022, he says it will trade less well this year as inflation expectations have fallen.
The bottom line. Instead of buying that stock market dip, investors should cut higher, he says.
His last observation is related to gold GC00
— and he says he’s not a gold bug, but that his trend indicators are now “shooting” for the precious metal for the first time in years.
Gold can be a tough call because it has to be “time perfect” and typically doesn’t outperform the 1970s as an inflation hedge. What has changed is that last year central banks bought the most gold last year since 1967.
“It is the lack of counterparty risk that is driving the central bank’s desire to exercise more control over gold that can now be seen,” Laduc said.
The markets
Nasdaq-100 futures NQ00
are rising on the rise in Meta boats and S&P 500 ES00 futures
are also higher. Bonds BX:TMUBMUSD10Y
are stable, oil CL
smooth, golden GC00,
silver SI00
and other metals HG00
PL00:
PA00:
up.
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The hum
Meta shares META
rose 19% in premarket trading after the Facebook parent missed earnings but gave improved 2023 revenue guidance and promised more buybacks.
Opinion: Zuckerberg and Intel are sending their layoff proceeds straight to Wall Street
And after the call, the big names will be announced: Apple AAPL,
Alphabet GOOGL
and Amazon.com AMZN,
Ford F,
Gilead GILD:,
Starbucks SBUX
and Qualcomm QCOM.
Also Merck MRK before the open,
Honeywell HON,
Bristol Myers BMY
and Eli Lilly report.
Baidu stock BIDU
HK: 9888
higher after rising in Hong Kong and late Thursday on news in the U.S. BlackRock raised its stake in the Chinese internet search giant to 6.6% at the end of 2022.
Adani Group companies continued to fall after hours after the Indian conglomerate canceled a $2.5 billion stake sale, as a scathing report from the Hindenburg Report on US short sellers continued to hit.
Weekly jobless claims come in at 8:30am ET and factory orders arrive at 10am
The best of the web
“The Last of Us” in real life. Rising temperatures may spread fungal infections, study finds
Diagram
Getting used to companies laying off workers?
@GRDecter
The tickers
These were MarketWatch’s most searched indicators as of 6 AM ET:
|
Ladies |
Security name |
|
TSLA: |
Tesla |
|
AFTER: |
Meta platforms |
|
BBBY: |
Bed Bath & Beyond |
|
AMC: |
AMC Entertainment |
|
GME: |
GameStop: |
|
APE |
AMC Entertainment Holdings Preferred Stock |
|
AMZN: |
Amazon.com: |
|
CVNA: |
Caravan |
|
AAPL: |
Apple: |
|
NO |
NO |
Random readings
A journalist’s somber ode to surviving a dead February goes viral.
No more king… Australia removes Charles III from banknotes
How Punxsutawney Phil can be a stock market indicator
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