Jeff deGraaf, Market Cycle Clock expert from RenMac, joins The Compound and Friends to discuss technical analysis, momentum factor, Apple outlook, Market Cycle Clock, the Fed, Starbucks earnings, and more. The podcast covers market trends, stock declines, market dynamics, consumer spending shifts, momentum analysis, potential 5% 10-year yield, and a fun comparison of John Wick and Ripley movies.
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Quick takeaways
Market Cycle Clock shows neutral positioning with average returns, aligning with Powell's inflation views.
Starbucks stock decline linked to poor earnings, consumer behavior shifts, and CEO acknowledgment.
Fed's decision on rates leads to positive market response, easing rate hike fears and supporting consumer spending.
Analyzing Apple's market position, revenue expectations, and growth areas compared to Microsoft.
Deep dives
The Market Cycle Clock Indicates Current Inflation and Growth Trends
The Market Cycle Clock displays a unique view of the current inflation and growth trends. It shows that inflation has risen but growth is still solid, positioning in a neutral zone leading to average returns. This clockwise movement is unusual and indicates potential alignment with Powell's statements on inflation and growth trajectories.
Starbucks Faces Challenges in Consumer Spending
Starbucks experienced a significant decline in its stock price following disappointing earnings results. The CEO openly acknowledged the poor performance, with global revenues down 1% year over year and global operating margins contracting. Starbucks mentioned issues like completion rate drop and high prices impacting consumer visits, signaling potential challenges in consumer spending trends.
Market Reaction to Federal Reserve FOMC Meeting
After the Federal Reserve FOMC meeting that left rates unchanged, the market responded positively, reflecting a shift away from concerns of imminent rate hikes or stagflation. The expected basis points for Fed cuts in 2024 decreased as the market held up well despite high uncertainty, with consumer spending and inflation trends playing key roles.
Impact of Starbucks' Stock Decline on Consumer Habits
Starbucks' stock decline reflects broader consumer behavior changes as individuals like reduced pricing or shift to making their own coffee due to high costs. Starbucks CEO cited economic conditions and completion rate drops, indicating potential shifts in consumer preferences impacting the company's performance.
Significant Analysis of Industry Groups and Stocks
Analyzing industry groups and stocks, the podcast discusses equal weight distribution and recent trends in industries like restaurants. The conversation delves into specific restaurant chains like Wingstop and Texas Roadhouse, highlighting the varying performance among different establishments.
Insights on Apple's Position in the Market
The podcast critically assesses Apple's market standing, comparing it to Microsoft and emphasizing the importance of distinguishing Apple's individual story from broader consumer trends. The discussion covers revenue expectations, growth areas like services, and market reactions to Apple's financial reports.
Momentum and Market Trends Analysis
The podcast deep dives into momentum indicators and market trends, particularly focusing on interpreting momentum through trend and rate of change. Insights on Russell 1000 momentum quartiles performance and market sentiment around semiconductors like Nvidia provide valuable analysis for navigating market movements.
On episode 140 of The Compound and Friends, Michael Batnick and Downtown Josh Brown are joined by Jeff deGraaf of RenMac to discuss: technical analysis, the momentum factor, the outlook for Apple, RenMac's Market Cycle Clock, the Fed, Starbucks earnings, and much more!
This episode is sponsored by Global X. Visit https://www.globalxetfs.com/ to explore a lineup of more than 90 ETFs, along with insights to help you navigate a dynamic investing landscape.
Investing involves the risk of loss. This podcast is for informational purposes only and should not be or regarded as personalized investment advice or relied upon for investment decisions. Michael Batnick and Josh Brown are employees of Ritholtz Wealth Management and may maintain positions in the securities discussed in this video. All opinions expressed by them are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management.
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