My top 10 things to watch Thursday, Jan. 25
- The economy grew at a faster-than-expected 3.3% annualized rate in the final three months of 2023. Estimates for Q4 gross domestic product had called for a 2% advance. Core prices, which the Fed prefers as a longer-term inflation measure, rose 2% year over year in the fourth quarter. That's right in line with the Fed's 2% inflation target.
- Bond yields drop on the GDP report, which seems to be just right. Strong growth and moderating inflation. The Dow, the S&P 500 and the Nasdaq are up Thursday after four straight record highs for the S&P 500. This is the kind of GDP number I was talking about in our Monthly Meeting and why I think a March interest rate cut by the Fed is not needed.
- Tesla is no longer magnificent, judging by disappointing quarterly results and warnings about "notably lower" EV volumes in the year ahead. That's why I kicked the electric vehicle maker out of the Magnificent Seven and renamed the group of market-leading mega-cap tech stocks the Super Six in my Sunday column. Many Tesla stock price target cuts after Wednesday's after-the-bell earnings.
- Three of the Super Six (Google-parent Alphabet, Amazon, Apple, Meta Platforms, Microsoft and Nvidia — all Club stocks) get positive mentions. Jefferies raising Amazon price target, and Deutsch Bank names it a top pick. Goldman Sachs says Apple set up for growth acceleration. Jefferies expects a slight beat for Alphabet when it reports its quarter next week.
- ServiceNow beat the estimates on the quarter. Didn't everyone know? This company is on fire.
- CNBC parent company Comcast delivers nice quarter. Dividend boost and buyback.
- Citi raises McDonald's price target to $327 per share from $308.
- CSX said to be bad financials. But multiple price target raises on the Street.
- IBM cost cuts and AI technology at scale.
- Humana may be worst quarter ever in history. Medicare Advantage not an advantage. Shares drop another 10%. That's on top last Thursday's 8% decline on negative updates. That day, we exited our very small remaining Humana position.
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