Morning Lineup - 12/19/23 - Like Oil and Water Tue, Dec 19, 2023 The Dow and the Nasdaq are both on pace for their ninth straight session of gains, and this morning's data on Housing Starts and Building Permits hasn't done anything to change the direction. Building Permits were ever so slightly weaker than expected, but Housing Starts came in significantly better than expected coming in at 1.56 million compared to forecasts for a level of 1.36 million. If these pre-market gains in futures hold, it will further reinforce the point that good economic news is good again now that the Fed has pivoted away from rate hikes. The energy sector was always the fuel to power the industrial economy, but in the digital economy, it has taken a back seat to technology. An example of the shifting role of each sector is the fact that in 1990, Energy accounted for 13.4% of the S&P 500’s market cap or more than twice the 6.3% weighting of the Technology sector. Today, Energy accounts for just 4.7% of the S&P 500’s market cap compared to Technology’s 27.9% weighting. While most stocks are positively correlated with each other, there has been little correlation between Technology and Energy in recent years, and the last two years provide a perfect example. The charts below show the annual returns of the Energy and Technology sectors since 1990. In 2022, Energy had its best year since at least 1990, rallying 59.0%. Technology, meanwhile, cratered 28.9% for its worst year since 2008 and its fourth worst year since at least 1990. This year (through 12/18), we have seen the opposite pattern playout as Energy has declined 4.3% while Technology has rallied 56.3% for its best year since 2009 and its fourth-best year on record. Looking at a comparison between the performance of the two sectors a little more closely, the chart below shows the annual performance spread between Technology and Energy for each year since 1990. Last year, Technology underperformed Energy by the largest amount since at least 1990, but this year it is outperforming Energy by the fourth largest margin on record. Additionally, there have been more years (6) in the last ten where the direction of Energy was the opposite of Technology than there were in the prior 24 years (5). Like oil and water, Energy and Technology just don’t mix.
hmm, i have an idea here that could work to allow both the long continuous running market discussion thread and this thread coexisting. since i tend to throw up a lot of contents in the morning's, i could use this thread for all of those content posts, and we can just use the other thread for the discussions. i am thinking of renaming this thread to something else so it doesn't confuse the new and existing members. since it could easily be construed that this thread and the continuous thread are the same thing. i wouldn't want to have 2 threads open for the same stuff haha. will play it by ear, but definitely thinking of making this as just a weekly market contents thread, and keeping the long running continuous thread as status quo. next year when i run the weekly market direction poll games again, i'll just use this thread to attach the polls. and people can opt to post their vote on the thread, but wouldn't be required as i'll just pull the list of members votes from the poll itself and add it to my members voting record spreadsheet. looking forward to next year. should be an interesting year.
Here is a final look at today's market and futures maps, as well as how each sector performed individually on Tuesday, December 19th, 2023. (EDIT: Updated to 4pm eastern close.)
LOL. I doubt we will be up 20% again next year unless the FED decides to cut rates back to near zero and launch another QE Should still be a decent year if we avoid a recession and the FED cuts rates at least a couple of times
BTW we will have full day of trading for Friday right? Usually we only have half day of trading for Christmas Eve but Christmas Eve is Sunday this year, I assume the market won't close early this Friday
oh that's a good question was wondering about that myself too. i just checked and looks like we do have a full trading day on friday. so you're correct in your assumption there! can't believe how quickly this year flew by. feels like years go by so quickly now as i age. not liking it tbh lol.
