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As we get ready to close out the week, we are adding our newest model to our lineup of thematic and targeted exposure models. We give you:
EPS Diplomats: Profitable large capitalization companies proven to produce above-average EPS growth and provide investors with the benefit of multiple expansions. So far in 2024, this model is up 5.22% vs. 4.78% for the S&P 500.
With that PSA out of the way, proceed!
With the S&P 500 continuing to flirt with the 5,000 level, the market will be contrasting several earnings reports out this morning with those from Cloudflare (NET), Affirm (AFRM), and Pinterest (PINS) last night. So far this earnings season, almost 81% of the companies that have reported in the S&P 500 have delivered better-than-expected results, significantly higher than the average beat rate of 67% since 1994.
That helps to explain the extended move higher in recent weeks even though Fed Chair Powell and recent economic data have taken a March rate cut off the table. Ahead of next week’s January Consumer Price Index report, the Bureau of Labor Statistics will publish revised CPI index figures as seasonal adjustment factors are recalculated to reflect price movements from the just-completed calendar year. Following last year’s significantly higher revision to CPI data, the market will review the data and what it could mean for Fed policy. If those revisions put the pace of inflation improvement at a slower pace, the market will be very interested in what Dallas Fed President Lorie Logan says at 1:30 PM ET today.
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Japan's trade ministry plans to spend up to 45 billion yen (around $301 million) to back a research group, including domestic chip company Rapidus, to advance semiconductor technology. Taiwan Semiconductor (TSM) will build a second chip fabrication facility in Japan with help from Sony (SONY), Denso, Toyota (TM), and the Japanese government.
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Sam Altman, CEO of artificial intelligence pioneer OpenAI, is in talks with investors to raise as much as $5-$7 trillion for a major project that would boost the world's chip-making capacity and its ability to power AI.
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There has been an “almost wholesale exodus” of larger container ships from the Red Sea and the adjoining Suez Canal… Those ships, which ferry everything from trainers to mobile phones from manufacturers in Asia to customers in Europe, have been taking longer routes to avoid the area.
That exodus is a big deal: The Suez Canal, which connects the Red Sea to the Mediterranean Sea, accounts for 10-15% of world trade, which includes oil exports, and for 30% of global container shipping volumes.
Related: Stay Focused: Don't Let the Fed's Rate Drama Distract You