Market Update Into February 5th: FOMC, Earnings, and NFP Volatility

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It was a volatile week with all eyes squarely focused on the FOMC decision, the NFP numbers, and earnings announcements from some of the markets’ strongest names.

Powell took a March rate cut off the table
META announced its first-ever dividend payment
WMT announced a 3:1 stock split
Non-Farm Payroll numbers came in blazing hot

Despite the strength seen across the indexes as the week came to a close, there is a potentially powerful narrative taking shape under the hood; Market Breadth is weakening. Let’s dig into the charts and see how things are looking.

Weekly Analysis

SPY (SPDR S&P 500)

Putting in new all-time highs to end the week, the SPY ETF closed at $495.23 (+1.42%). As the price breaks through the ascending channel, the net new high’s list continues its decline from the December peak, resulting in a clear Breadth Divergence that warrants concern.

This is a daily chart of the SPY index which shows price breaking out of an ascending channel while market breadth divergence is occurring.

QQQ (Invesco QQQ Trust)

After monster earnings results from 5 of the Magnificent 7, the QQQ ETF put in another new all-time high and closed the week at $429.72 (+1.32%). Like the SPY, the divergence seen in Market Breadth is notable and worthy of caution.

This is a daily chart of the QQQ index that shows price stalling just shy of the top of a rising wedge while breadth diverges, making lower highs despite price making higher highs.

IWM (iShares Russell 2000)

The IWM ETF, which closed at $195.98 (-0.80%), continues its push into the apex of the symmetrical triangle as breadth follows price, making lower highs since the December peak. Bulls will want to see the 50 SMA continue to act as support.

This is a daily chart of the IWM which shows price consolidating within a symmetrical triangle. Support is being found at the 50 period SMA while market breadth continues to decline.

Earnings

This is an image that shows all of the earnings data from the most important companies that reported this week.

Notable Results

AAPL (Apple, Inc.)
EPS: $2.18 vs $2.10 est
SALES: $119.60B vs $117.91B est

AMZN (Amazon.com, Inc.)
EPS: $1.00 vs $0.80 est
SALES: $170.00B vs $166.21B est

META (Meta Platforms, Inc.)
EPS: $5.33 vs $4.95 est
SALES: $40.11B vs $39.17B est

MSFT (Microsoft Corporation)
EPS: $2.93 vs $2.77 est
SALES: $62.0B vs $61.14B est

GOOG (Alphabet, Inc.)
EPS: $1.64 vs $1.59 est
SALES: $86.31Bvs $85.33B est

AMD (Advanced Micro Devices, Inc.)
EPS: $0.77 vs $0.77 est
SALES: $6.20B vs $6.10B est

XOM (Exxon Mobil Corporation)
EPS: $2.48 vs $2.21 est
SALES: $84.34 vs $85.23 est

CVX (Chevron Corporation)
EPS: $3.45 vs $3.21 est
SALES: $47.18B vs $51.62B est

What’s Happening Now

NFLX (Netflix, Inc.)

Netflix kicked off 2024 with a blockbuster 15.9% rally in January, and history suggests the rally may be far from over. February is historically Netflix’s time to shine, having only stumbled twice in the last decade.

This is an image of the monthly seasonality chart for Netflix, which shows February as the strongest month historically for the name.

AMD (Advanced Micro Devices, Inc.)

After reporting mixed Q4 earnings and weaker-than-expected guidance, AMD received a wave of buy ratings and 12-month price target increases, the highest coming from Keyblanc, setting a $270 per share target, representing a 52% upside from Friday’s close.

This is an image of all recent analyst upgrades for AMD.

BA (Boeing Company)

Down 18.3% YTD, Boeing approaches its strongest week of the year, boasting a 90% win rate and a 3.21% average return over the last decade, but will that be enough to save this plane crash?

This is an image of the weekly seasonality chart of Boeing, which shows that next week is its strongest week of the year, with a 90% win rate.

Believe it or not, this is just a fraction of what happened in the markets this week. For a full run down delivered straight to your inbox every weekend, sign up for The Official TrendSpider Newsletter!