MetaVerse: Don’t call IT a Comeback

The S&P 500 rallied to new all-time highs last week gaining +1.4% boosted by technology stocks.  The index ended last week at 4958 for its 4th straight weekly gain.  Last Wednesday, the S&P 500 closed out January with a +1.6% increase for the month. That makes it three consecutive monthly gains during the historically strongest 3-month period of the year, November through January.  The S&P 500 is now up nearly +4% for 2024 to date led largely by large cap technology names.

The gains last week came as a number of large-cap companies including Apple (AAPL), Mastercard (MA), (AMZN) and Meta Platforms (META) posted quarterly financial results above analysts’ expectations. Over the last week, over 67% of the S&P 500’s components that reported quarterly results posted earnings above analysts’ expectations. The week’s overall S&P 500 earnings came in about +7.7% above expectations, according to Bloomberg data.

The BLS data on Friday showed stronger-than-expected job growth last month as hourly wages continued to accelerate. Nonfarm payrolls rose by +353,000 in January, well above the consensus estimate for a +185,000 gain, according to a survey compiled by Bloomberg. The unemployment rate remained unchanged at 3.7% on a monthly basis; a 3.8% rate had been expected.  Curb your enthusiasm for these numbers as they are not “real”.  For an enlightening analysis of the government data click here:

The consumer sectors had the largest percentage increases of the week, with consumer discretionary climbing +3.8% and consumer staples up +2.1%. Health care climbed +2.0%, industrials added +1.9% and communication services rose +1.6%. Other gainers included financials, technology, materials, and utilities.

The often maligned, formerly known as Facebook stock, after declaring 2023 a year of “efficiency”, renamed Meta Platforms reported a historic 4th quarter of both margins and revenue growth and the stock recovered to a new all-time high. The stock rocketed +20.5% on the week! Yes, the week.

In consumer staples, shares of Sysco (SYY) rose +8.4% as the provider of food products for the foodservice and hospitality industries reported fiscal Q2 adjusted earnings per share above analysts’ expectations and reiterated its guidance for fiscal 2024.Only two sectors ended the week in the red: Real estate shed -0.5% and energy declined -1.0%. Both sectors succumbed to higher interest rates, The drop in energy came as crude oil futures fell.

The real estate sector’s decliners included shares of Boston Properties (BXP), which fell -11% on the week. The real estate investment trust reported Q4 funds from operations and revenue came in slightly above analysts’ mean estimates but much of its guidance range for 2024 funds from operations fell below the Street’s then view.

This week’s earnings calendar features McDonald’s (MCD), Caterpillar (CAT), Eli Lilly (LLY), Amgen (AMGN), Walt Disney (DIS), Uber Technologies (UBER), CVS Health (CVS), Philip Morris International (PM), ConocoPhillips (COP) and PepsiCo (PEP).

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(Table) WEEK ENDING 2/2/2024