Weekly Watchlist Jan 12
Credit Card Interest Rate Caps Coming Soon?
Welcome back to another Weekly Trade Plan with The Dividend Journal! If this is your first time here, great timing. This newsletter is your one stop briefing to stay ahead of the market and step into the week fully prepared.
🎯 Initial Thoughts + TLDR
The market has rallied into new record highs with S&P 500, Dow, and Nasdaq gains on stronger sentiment and improving unemployment metrics. Energy, housing, and small caps have led recently, while rate‑cut expectations and Fed positioning remain key drivers.
Also, Trump on Thursday called for the purchase of $200 billion in mortgage bonds, similar to how the Fed in the past has bought bonds backed by mortgages to bring down mortgage rates. The President has also proposed the restriction of institutional home purchasing. This is directed towards Blackrock and their home purchasing and preventing institutional participation could potentially lead to a more liquid housing market.
Trump has also announced an intent to cap credit card interest at 10% for a year starting Jan 20. He didn’t go in depth on the method of implementation but this brings up an interesting prospect of BNPL companies like AFRM 0.00%↑. US consumers spent over $20 billion this past holiday season via BNPL programs. It’s clear that this form of consuming is becoming a norm in terms of purchasing. Ignoring the delinquencies for sake of argument, BNPL with 0% interest is definitely more attractive in today’s day and age when you compare it to 25%-30% APR on normal credit cards.
On the other hand, despite large cap stocks continuing to lag behind like NFLX 0.00%↑ and META 0.00%↑, we have seen market breadth steadily improve. The $NYMO actually curled up as of Friday’s close showing more market participation in this rally. When we get a larger market wide participation in rallies, that indicates health strength. The warning sign would be if we were only leading from a couple large caps. I anticipate we will start to see some more buying flow into large caps soon. We’ve already started to see some of those price spikes in names like AMZN 0.00%↑ and GOOGL 0.00%↑.
📅 Key Earnings & Economic Calendar
Tuesday, January 13th: CPI
Wednesday, January 14th: PPI & Retail Sales
Thursday, January 15th: Unemployment Claims
Earnings this week, courtesy of Earnings Whispers:
📈 Market Update: As of Friday, Jan 09
SPY 0.00%↑: With $NYMO indicating strong market breadth on this rally, we see this reflected in price of the indices. A healthy retest of the breakout spot at 687.67 and then continuation Friday. From here, the real breakout starts in my opinion. This is technically the end of a 3 month consolidation period, so this move up can be seen as just getting started. This is supplemented by the fact that the QQQ 0.00%↑ hasn’t even hit a new ATH. This clearly shows you the strength is in other names like industrials, energy, and financials. These are names like JPM 0.00%↑, GS 0.00%↑, C 0.00%↑, CAT 0.00%↑, and XOM 0.00%↑.
Bitcoin: I hope y’all were paying attention to the 94k spot on Bitcoin! This is the exact zone where we rejected and failed to close above this past week. Once again, this reaffirms the validity of this resistance zone we’ve mapped out. We will continue to monitor the price action and wait for daily closes above the 94k spot to entertain a reclaim of 100k. When crypto starts to truly gain momentum, my focus will be on names like COIN 0.00%↑ and CRCL 0.00%↑.
