Earning season starts on Friday the 13th! Will it be good or bad luck for the markets?

January 13 2023

Weekly Column with The Contrarian

Hello Earnings season!

Friday January 13th starts off the earning season with a number of banks reporting good earnings. This news caused bank stocks to rally 2.5%. Bank profits are up because of higher interest rates. This sector should outperform the general market. The S&P has made a nice run higher since the start of 2023. Many money managers have been putting cash back into risk assets.

CPI was released on Thursday which showed a drop of .1% decline from last month, But rose 6.5% over the last 12 months, not seasonally adjusted. The index for all items less food and energy increased .3% in December (SA); up 5.7%over the year (NSA). After this report the S&P rallied 2.5% and as for the close today it's up 3% for the week.

The market rally was expected based on my analysis over the past number of posts. The S&P closed near yearly highs at 4020.00 on the March contract. It will be interesting to hear what companies say about profits going into the year. Is this a "Buy the rumor, Sell the facts" rally? We will see as other sectors report earnings. I expect the S&P to rally up to the 4045 level on the March contract. This resistance level coincides with the 200 day moving average. The past three times we approached the 200 day the market failed and broke into another leg down.

What is interesting to me about the rally in equities is the fact that raw commodity prices have bottom and are breaking out to the upside. Gold broke out first, Copper broke out this past week as well. Silver is at the apex. which is bullish. Crude oil is at the apex too. This bullish price action in commodities is due to the reopening of China and a selloff in the U.S. Dollar's with a break under support at the 103.00.

Over 2023 I will be covering my global vision of the future.

2/World Economies; Re-Globalization

Communism vs. Democracy

Evil vs. Good

All About Resources

Factors Affecting the 2/World Economies

Hard Commodities-Raw Materials

Soft Commodities-Food/Water

Labor Force

Advanced Tech-knowledge

Military Strength

Stay tuned!

Any views expressed in the below are the personal views of the author and should not form the basis for making investment decisions, nor be construed as a recommendation or advice to engage in investment transactions.