Market Update Newsletter 1/10/23

Markets tried to extend a rally yesterday but gave up much towards the end of the trading day. The market is opening up flat today. Bitcoin is above $17k.

Earnings season is anticipated to be less than optimal. Tech is in a bear market and many companies will likely miss earnings and guide down. This will create a wave of downgrades and drive down stocks for the coming quarter. The risk is off.

Credit card use is up from last year and card balances are up 15% while personal savings are sinking.

Stocks to Watch

Allstate (ALL) receives multiple price target raises. Insurance is a less risky bet than other industries in the current environment.

Lululemon (LULU) unfortunately has lost some steam lately. Inventory is too high and discounts abound. The mirror never took off and the whole stock really shows how less consumer spending is affecting the market.

Microsoft (MSFT) received a price target cut by Barclays, but with an overweight rating. Microsoft's Azure cloud growth is a concern and PC demand is also questionable in the coming months.

Happy Investing,

The Punkrock Capitalist