This tech sector is relentlessly rising under cover of a dull market

Commentary, News, Stocks

Critical information ahead of the U.S. trading day

January has passed its halfway mark. And thank goodness for that. Yawn.

“It all feels as though markets are a little lost and searching for the next big thematic to key off,” says IG’s Chris Weston, trying to explain the mood.

The Dow is up 0.2% for January so far, and is stuck in its smallest-ever monthly range, notes LPL Financial. And while the S&P 500 is still on track for the biggest election-to-inauguration gain since 1996 — up 1.5% — it hasn’t had a 1% intraday move for 21 straight days. That’s the longest such streak since late 2014, LPL adds.

Less dull is the Nasdaq, up 3.2% this month. Investors’ tech love should keep playing out this morning, with Netflix shooting ahead after some blowout subscriber numbers.

That brings us to our call of the day, from Greg Guenthner of the Daily Reckoning blog. He says those unable to block out the noise — or lack thereof — may be missing some big market gains that have been going on for quite a while.

“Semiconductors have slapped around the rest of the market since they fought off their lows and broke out to new 2016 highs all the way back in June. Now they’re ready to continue their dominance as the tech sector comes back into focus,” Guenthner says.

Against an 18% rise for the S&P 500 index over the past 12 months, techs are up nearly 25%. But semis, as measured by the VanEck Vectors Semiconductor ETFSMH, +1.77%  , have shot up nearly twice as much with a 48% rise, he notes. NVIDIA NVDA, +1.82%   , Broadcom AVGO, +3.30%  and Intel INTC, -0.11%   are among the top five holdings.

Guenthner doesn’t see the semi breakout, which started in June 2016, fading soon. Read more here.

We’re still a day away from the presidential inauguration. Bored? Careful what you wish for.

Key market gauges

Futures for the Dow YMH7, -0.06%  , S&P 500 ESH7, -0.06%  and Nasdaq-100NQH7, -0.03%  are pointing south. On Wednesday, the S&P SPX, +0.18%  and Nasdaq Composite COMP, +0.31%  closed marginally higher, but the DowDJIA, -0.11%  slipped.

The dollar DXY, +0.08% is still benefiting from Federal Reserve chief Janet Yellen’s rate hike comments. Note the European Central Bank meets today and hopes are running high for a dull affair. European SXXP, -0.11%  stocks are off ahead of the ECB.

Asia ADOW, -0.29%  closed mixed, while the Nikkei ended higher even as Toshiba tumbled. Gold GCG7, -0.83%  is down, and oil prices CLG7, +1.00%  are up.

See the Market Snapshot column for the latest action.

The chart

More on the snooze moves for stocks:

Since Thanksgiving, the S&P 500 has alternated between weekly highs and lows for eight consecutive weeks. That’s only the 10th time that’s happened since 1928, notes LPL Financial. Here’s a chart laying out the ups (green) and the downs (red):

StockCharts

Earnings

Netflix NFLX, +7.20%  is up nearly 8% in premarket action, after stronger-than-expected earnings, fueled by a big jump in international subscriber growth. It’s all about customer bonding.

KeyCorp KEY, +0.39%  and Bank of New York Mellon BK, -0.43%  will report ahead of the market’s open. American Express AXP, +0.40%  and IBM IBM, -0.65%  are due after the close.

The quote
Reuters

Don’t blame China, says Alibaba exec. Jack Ma in Davos

“It’s not that other countries steal jobs from you guys. It’s your strategy. Distribute the money and things in a proper way.” — Jack Ma, speaking to CNBC in Davos.

The Alibaba BABA, +0.42%   founder says the U.S. has blown $14 trillion in fighting wars over the past 30 years, when it could have been boosting infrastructure.

The buzz

Help! Paul McCartney is suing Sony’s SNE, -0.49%  music unit to take back the copyrights to Beatles songs he mostly co-wrote with John Lennon.

CSX CSX, +19.47%  shares may gain, after reports that exiting Canadian Pacific Railway CP, -0.45%   CEO Hunter Harrison will join with activist investors to target the railroad giant.

The Feds are suing Navient NAVI, -2.74%   , the nation’s biggest student loan servicer, alleging it scammed borrowers.

Toshiba 6502, -15.98%  plunged 20% in Tokyo on reports losses for its nuke business could be bigger than expected.

Facebook FB, +0.26%  CEO Mark Zuckerberg has been making speeches on his page, raising suspicions that he’s up to something — maybe Zuck 2020?

The economy

Weekly jobless claims, housing starts, building permits and a Philly Fed survey are all due at 8:30 a.m. Eastern Time.

Yellen speaks for a second day, talking about the economic outlook and monetary policy at 8 p.m. Eastern in Stanford.

The stat

70% — Since 1953, during a new president’s first term in office, the S&P 500 was higher at the end of the first 100 days this percentage of the time, according to Sam Stovall, chief investment strategist at CFRA.

Breaking that down by political party, the S&P 500 rose 60% of the time under five Republican presidents and 80% of the time under Democrats. The average gain for the S&P was 1.6%.

Random reads

As many as 30 feared dead in Italy as rescuers begin removing bodies from a hotel hit by an earthquake-caused avalanche.

100,000 have signed a petition asking the Girl Scouts to ditch Trump’s inaugural parade

Inside the Kremlin, initial euphoria over Trump is fading

Rick Perry was apparently confused about that energy secretary post.

Read this article in its original format at MarketWatch.com


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