Stock bulls remain in control after pushing all three major indexes to new all-time record highs.

For those keeping track, this is the 12th record closing high for the S&P 500 this year with the index now up +6.7% in 2024. The Nasdaq’s new record closing high is its first since 2021 and puts the index up nearly +7% the first two months of the new year, while the Dow is up +3.7%.

Much of the enthusiasm stems from Nvidia’s blowout earnings after the market close on Wednesday, which tech bulls believe reinforced the sky-high profit expectations that investors have been building around artificial intelligence. The main debate now is whether the AI-fueled rally has pushed tech stocks into bubble territory?

For what it’s worth, Nvidia’s stock rally yesterday added close to $280 billion to its market cap, by far the largest single-session gain in market history. This year alone, Nvidia’s market value has grown over +$700 billion and is now within striking distance of the $2 trillion mark.

Traders today will be focused on earnings reported by Berkshire Hathaway and Warner Brothers Discovery.

There is no major economic data on the calendar.

Looking to next week, the earnings calendar really starts to thin out and most of the big names are behind us. That means investors are likely going to be paying even closer attention to economic data, especially as Wall Street continues trying to guess how much the Federal Reserve will cut interest rates in 2024.

On that note, Wall Street is extremely anxious to see the February Employment Report due out next Friday. If you recall, the January jobs report came in very hot with over +350,000 jobs added. More concerning was the uptick in hourly wage gains to an annual rate of +4.5% versus +4.3% in December. Many bulls have dismissed the strong January jobs data as being skewed by seasonal adjustments so they will be looking for a much softer February report to confirm that belief. The risk is that February data also tops expectations, reinforcing concerns that the US economy is still too hot to bring inflation down to the Federal Reserve’s +2% target rate.

Ahead of the jobs report, investors will be dissecting the January Job Openings and Labor Turnover Survey (JOLTS) on Tuesday and the ADP Private Payroll Report on Wednesday for more clues on how the labor market is trending.

Other key data next week includes Factory Orders on Monday; Wholesale Inventories on Tuesday; and Q4 Productivity & Labor Costs and Consumer Credit on Wednesday. Earnings will include the first half of a string of key retailers that report over the next two weeks, including Lowe’s on Tuesday, TJX Cos. on Wednesday, and Best Buy and Bath & Body Works on Thursday.

Other highlights include Zoom Video on Monday; AutoZone, eBay, JM Smucker, and Monster Beverage on Tuesday; HP, Salesforce, and Snowflake on Wednesday; and AnheuserBusch InBev, Autodesk, Dell, and Hormel Foods on Thursday.

Let's also not forget, the US government is nearing the possibility of partial shutdown late next week, as four different kinds of appropriation bills have their deadlines end next Friday.

Then there's a second set of deadlines the following Friday, March 8. We also still have a war brewing between Russia and Ukraine and ongoing fighting in the Middle East.

Mob Psychology" Could Fuel a Dangerous Stock Meltup:  Ed Yardeni, president of Yardeni Research, and his team have been on the hunt for signals that will help them spot market meltups, such as a rapid rise in stock prices. He and his team looked at data showing industry analysts’ consensus expected long-term earnings growth or LTEG, for S&P 500 companies. It reflects analysts’ annualized expected earnings growth over the next three to five years, weekly data is available from 1985. That average growth rate has been 12.5%, versus nominal GDP growth that has averaged 6.3% since 1948, he notes. The earnings of the overall stock market can’t grow twice as fast as the economy does. We conclude that industry analysts are naturally too bullish on the long-term earnings prospects of the companies they follow. Very few of them choose to cover companies that have sub-average earnings growth or might go out of business, he says. He highlights some past LTEG meltups. One occurred during the late 1990s tech bubble, then LTEG peaked at 18.7% during the week of Sept. 7, 2000. Another came in 2018 following a corporate tax rate cut that lifted margins, it peaked at 17.6% on Oct. 10, 2018. The LTEG currently sits at 18.4%, right in line with prior elevated meltup readings, he notes. Such moves can feed on themselves. The feedback loop occurs when rapidly rising share prices convince industry analysts that they need to raise their estimates for the revenues, earnings, and profit margins of their companies, says Yardeni. Wall Street analysts try to justify those estimate increases by convincing themselves and clients that fundamentals have vastly improved, which is why the stocks of the companies have moved higher than they had expected and is why they are scrambling to raise their estimates, he said, in a note. Source Market Watch

Reddit Going Public: Reddit on Thursday filed to go public. Its market debut which is expected in March will mark the first major tech initial public offering of the year and the first social media IPO since Pinterest went public in 2019. The social media company, founded in 2005 by technology entrepreneurs Alexis Ohanian and Steve Huffman, has raised about $1.3 billion in funding and has a post valuation of $10 billion, according to deal-tracking service PitchBook.The company plans to trade on the New York Stock Exchange under the ticker symbol “RDDT.” Source CNBC

Half of College Grads Are Working Jobs That Don’t Use Their Degrees: Roughly half of college graduates end up in jobs where their degrees aren’t needed, and that underemployment has lasting implications for workers’ earnings and career paths. That is the key finding of a new study tracking the career paths of more than 10 million people who entered the job market over the past decade. It suggests that the number of graduates in jobs that don’t make use of their skills or credentials—52%—is greater than previously thought, and underscores the lasting importance of that first job after graduation. Of the graduates in non-college-level jobs a year after leaving college, the vast majority remained underemployed a decade later, according to researchers. The findings add fuel to the debate over the value of a college education as its cost has soared—and whether universities are producing the kind of knowledge workers that employers say they need.  Source WSJ

Texas Project Tests Drones for Rural Health Care: A new project in West Texas will test if drones can help deliver health care to rural communities. Working with Matador UAS Consortium, academic and industry partners accelerating the use of drones in rural health care, Texas Tech University Health Sciences Center (TTUHSC) is testing drone delivery of medical supplies to Presidio, Texas. Located close to the border between Texas and Mexico, Presidio is hours away from an urban healthcare center, Linda Molinar, Presidio County Medical Clinic CEO, said. Dr. Phil Sizer, the lead researcher and head of Matador UAS Consortium, said testing the technology has just started, but the possibilities are encouraging. Sizer said the drones can be used in several ways – to deliver prescriptions and medical supplies, to deliver medical samples or test results, or even to assist doctors in telehealth situations during search and rescue operations.  Source Daily Yonder

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