The Canadian Vanguard Stock Market Report At Close – Friday, January 26, 2024
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Data Driven Market Report And Analysis For Monday’s Winning Trades
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The Toronto Market as at Friday
The TSX composite index was up 23.74 points or 0.11% to close today’s market session at 21,125.28. The index has managed to remain above the 21,000 level for four market sessions. The TSX is holding above the 21,000 level but the total volume of shares traded has decreased the last couple of sessions.
Seven sectors ended the market session with gains with Technology leading the pack. There is a good spread of sectors with gains but no sector with a “giant gain”. Investors are clearly showing some moderation or controlled enthusiasm. Technology lead the pack of gainers with 0.82% while the worst performing sector declined -0.42%. Energy, Financials and Industrials had gains of 0.26%, 0.18% and 0.11% respectively. Moderation is in vogue for now. That makes sense since a number of stocks are extended and the risk of a possible pullback at anytime is real.
For the week, Healthcare gained 3.01%; Energy was up 2.42%; Technology gained 1.57%; Durable Consumer Goods & Services was up 1.45%, Financials was up 1.3% and Basic Materials was up 1.23% to complete the list of sectors with higher than 1% gain this week.
The best performing industry at the TSX on Friday was Medical Equipment, Supplies & Distribution with 4.8% gain. Coal industry ended the market session with 3.63% gain; Media Diversified was up 3.16%; Construction Materials gained 2.89% and Broadcasting gained 2.82%.
Today’s Statistics: The gaining issues (advancers) outnumbered the declined issues (decliners) today. The ratio was 1.08-to-1.00 or roughly for every eleven advancers there were ten decliners – neither bullish nor bearish. In real numbers, 731 advancers to 677 decliners with 120 Unchanged. The total volume of shares traded for gaining stocks was 141,729,412 or 65.3%; the total volume for declined stocks was 88,364,368 or 31.8% and 7,650,110 or 3.0% for “Unchanged”.
There were 126 new 52-Week Highs and 12 new 52-Week Lows. That is quite bullish. The rally is very much alive but the market session’s volumes are declining and that limits how much confidence we can put on the conclusion from the data analysis.
The total volume of stocks traded at the TSX today was 237,743,890 compared with 261,808,540 yesterday, a little over nine percent decrease. Today’s volume of 237,743,890 is about fourteen per cent lower than the average of the ten most recent market sessions.
Oil price was on a steady but slow upward climb for most of this week. Governor Macklem of the Bank of Canada, in an interview with The Wall Street Journal on Wednesday, said it remains “premature” to talk about rate cuts because senior officials remain worried about stubbornly high core inflation, which strips out volatile-priced items like food and energy. The markets are still being driven by the likelihood of interest rate cuts during the year.
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The US Markets
The Dow Jones Industrial Average was up 60.30 points, or 0.16%, to close at 38,109.43. The S&P 500 was down -3.19 points, or -0.07%, to close at 4.890.97. The Nasdaq Composite declined -55.13 points or -0.36%, to close at 15,455.36. It was a session of no big declines and only reasonable gains.
Technology with -0.61% decline was the only sector to end the session in red. Nine of the major sectors ended the market session in green. It was a pretty broad-based positive session. Energy with 0.91% was the top performing sector. Oil price has been on a steady but slow upward climb for most of the week. Telecommunications Services was up 0.63%; Healthcare was up 0.55%; Durable Consumer Goods & Services gained 0.51%; Financials was up 0.33%; Basic Materials was up 0.25% and Industrials was up 0.13%. Investors who were not chasing Big Technology stocks prices in to the stratosphere probably found the session pretty decent.
For the week, Utilities sector was far ahead the big winner up 39.58% for the week; Energy was up 4.36%; Technology was up 1.87% Financials gained 1.86% and Basic Materials was 1.5%.
Consumer Financial Services, up 3.48%, was the top performing industry; Beverages – Distillers & Wineries was up 2.30% and Pharmaceuticals – Generic & Specialty was up 2.2%. Airport Services and Aluminum were up 2.17% and 2.01% respectively. Readers who paid attention to this report during the last couple weeks probably realized that Airlines, Airport Services and Aluminum had steady gains over the period. It is important to remember though that we provide market data & analysis but we do not recommend specific stocks. The market will do what it wants to do and we will not try to. The Canadian Vanguard is not interested in and we deliberately avoid predicting the market. A key to successful investing is to combine fundamentals with market data when making decisions on stock purchases.
Today’s Market Statistics: Today, the gaining issues (advancers) were literally even with the declined issues (decliners) on the NYSE. For every advancer there was a decliner. The total volume of volume-gaining stocks was 486,421,891 or 60.8%; the total volume of declined-volume stocks was 290,734,433 or 36.3%; and 23,473,766 or 2.9% “Unchanged”.
There were 332 new 52-Week Highs and 35 new 52-Week Lows. That is outlandishly bullish. The market continues to rally but the rally is more pronounced with specific industries.
The total volume of stocks traded at the NYSE today was 800,630,090 compared with 907,579,177 yesterday, a 12% decrease. Yesterday, the volume was down 8.5% from the previous session. Today’s volume of 800,630,090 is about twelve per cent lower than the average of the ten most recent market sessions. This week the market has produced bullish performances but with reduced investor participation.
On the NASDAQ, the advancers edged out the decliners by a ratio of roughly one decliner to one advancer or a ratio of 1.05 -to-1. In real numbers, there were 2,177 decliners to 2,066 advancers with 360 unchanged. The volume of stocks traded today was much lower than at yesterday’s market. The total volume of volume-gaining stocks was 2,494,559,453 or 54.1%; the total volume of declined-volume stocks was 2,038,198,094 or 44.2% and 80,957,950 or 1.8% for “Unchanged”.
There were 140 new 52-Week Highs and 80 new 52-Week Lows. The real story is in the declined volumes and when we factor that in, then things are not as bullish as they first appear. A good number of the big Technology stocks that normally power NASDAQ actually declined today.
The total volume of stocks traded at the NASDAQ today was 4,613,715,497 compared with 5,361,510,143 yesterday, a 14% decrease. Today’s volume of 4,613,715,497 is about eleven per cent lower than the average of the ten most recent market sessions.
The market outlook remains: The rally is alive, but trade with caution.
Oil and the money markets: Oil price has climbed steadily this week and is inching close to $78 per barrel.
10 –year Treasury Yield: The US 10-year Treasury yield closed at 4.153% on Friday, compared to 4.128% Thursday, while the five-year Treasury yield closed at 4.054%, up from 4.014% on Thursday.
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Stocks In The News/Stocks To Watch
The US Markets
The focus in this section today is not on specific stock performance but on the earnings reports. This week, the earnings season picks up steam as a number of the big tech companies report. This is worth noting since a good number of the technology stocks are already extended.
Super Micro Computer Inc. (SMCI) gained 12% this past week. The company provided a glimpse into the earnings report a few days back and the SMCI stock has been on a tear for most of last year. The company’s stock price has fundamentals behind it. Super Micro Computer Inc. has a big share of the artificial intelligence and data center market because of the company’s expertise in liquid-cooled server racks. Computing by servers is done by the processors (CPUs) and the more load on the processors the hotter they get and as such more cooling is required to keep them humming. The problem is that things get more complicated than simply pointing the fan at the object being cooled which is the approach with air cooling. Supercomputers tend to employ liquid cooling as liquids can carry more heat away more quickly and predictably than air cooling – basic Physics. Most liquids and electronics do not mix well. Super Micro Computer Inc. specializes in liquid cooling in the data center, a big advantage in an era of AI computing which requires heavy, intensive processing load.
SMCI reports late on Monday, Advanced Micro Devices (AMD) reports on Tuesday and Meta Platforms (META) which last week returned to trillion dollar valuation reports on Thursday.
Microsoft (MSFT), Amazon.com (AMZN) and Apple (AAPL) report earnings this week. It is a big week of earnings ahead.
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