Good Morning,
I hope everyone had a great weekend. Congratulations to the Seattle Seahawks on their Super Bowl LX victory!
Markets opened mixed this morning coming off a week that saw the DOW close above 50K for the first time ever. Investors continue to contemplate the massive amount of capital expenditures going towards AI and infrastructure. Alphabet, Microsoft, Meta, and Amazon are expected to spend nearly $700 billion combined this year to fuel their AI build-outs. Nvidia’s CEO had comments Friday that he believes this massive buildout is justified and sustainable which helped investor optimism. Even with all the talk around AI, we continue to see this market broaden out which has helped the value narrative I have been talking about. This Wednesday we get the delayed January jobs report and CPI on Friday. These will garner the most attention but I am curious to see the retail sales numbers released tomorrow. Two interest rate cuts remain priced for the duration of the year with the first coming in June. I think corporate earnings stand to benefit from larger tax refunds this season which should provide momentum looking towards Q2 and beyond. The set-up remains one where I favor higher cash flow companies and patience. Any near-term volatility will likely turn into a great buying opportunity. Please continue to reach out with questions/comments.
Attached, please find this week’s Market Strategy Radar Screen Report from John Stoltzfus, Chief Investment Strategist of Oppenheimer Asset Management.
Have a great week!