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Carlsquare weekly market letter: Follow the wind!

  • It is a busy week ahead with the S&P 500 reporting earnings from GOOG, MSFT, AMD, AAPL, META and AMZN. In addition, the US Treasury will provide its latest forecast. And perhaps most importantly, it is time for Jerome Powell to speak again today, Wednesday…
  • The stock market is likely to have a couple of weak weeks before the big tech companies’ reports hit the market and set the tone for the whole earnings season. The best thing to do is to batten down the hatches and prepare for the coming storm. But don’t forget that the trend is your best friend and the market is still up! It’s better to go where the wind takes you, as we say when sailing

Before the last Fed meeting, Powell was a bit hawkish. Then he did the opposite when he said that the Fed was probably done raising rates for this time. This gave the market a further boost.

We have received a lot of feedback on the last two weekly letters. At the start of the year, we argued that both the US government under Janet Yellen and the Fed under Jerome Powell were likely to support the market with liquidity to help Biden win over Trump in the presidential election due in November 2024. This is of course a bit of a stick in the eye, but we have received no pushback other than the usual gloomy dystopian ones that always expect a crash around the corner.

We expect Jerome Powell to stick to the script at Wednesday’s press conference and slowly move towards a more dovish stance to help the market. He cannot be too dovish, because then people will lose confidence in the Fed and in the US government’s ability to handle the rising tide of debt.

The US government will be selling more and more bonds next year. In order not to move inflation expectations, the Treasury is selling more and more short-term debt in the form of 3-month treasury bills rather than long-term bonds. This will create a new challenge in 2025 as an increasing amount of debt matures. Perhaps the wheels can be set in motion all the way through 2024 before the crisis hits the bond market again. Still, this seems to be the way to help President Biden get re-elected next year.


Skyrocketing US debt is a market issue. But unless someone tries to take on the US government and the Fed, the debt can keep rising. But keep a close eye on the bond market. Today the US Treasury will release its Quarterly Refunding Announcement (QRA). The QRA is where the Treasury tells the world how much debt will be issued and where it will be placed on the curve. This is a new focus in the market as more and more people are concerned about the mountain of debt and how the debt is structured.

With so much news in the coming days, we will keep this market update short.


The S&P 500 is still in a positive trend since the autumn of 2022, when it was completely oversold. The downturn came after the energy crisis, which caused the explosion in inflation that is still hurting the economy. When the inflationary momentum slowed, the stock market recovered quickly.

But most of the rally was in technology companies, which are not as vulnerable as, say, consumer and cyclical companies. We have this mega-focus on the big seven.

Google, Microsoft and AMD report on Tuesday 30 January. On Thursday 1 February, Apple, Meta (Facebook) and Amazon report. Most of these stocks are in the same strong uptrend as Google, Microsoft, META, Amazon and AMD.


The strong trend will make stocks vulnerable to disappointment, so the quarterly reports will be very important..


Apple is an exception among the big tech stocks and is showing renewed technical weakness. If this continues, it could be a warning sign for the broader market, so keep an eye on Apple!

Our main theme is that 2024 could be a good year for the stock market. However, we also expect rough waters with high volatility. As you can see from the S&P 500 chart above, the index is trading at a resistance line. In the short term, a pullback would be natural. In the longer term, the lows should be a buying opportunity.

Happy trading!

Q4 2023 reporting season

S&P500 stocks in the US

As of Friday 26 January 2024, around 125 S&P500 companies have reported their fourth quarter results. 69% of S&P companies have reported a positive EPS surprise and 68% have reported a positive revenue surprise.

For the fourth quarter of 2023, the earnings decline for S&P500 companies is currently at minus 1.4%, compared to minus 1.7% last week. On 31 December 2023, Wall Street analysts estimated earnings growth for S&P 500 companies at 1.6% for Q4 2023.

Seven large companies in the IT Services and Media sectors (Amazon, Apple, Alphabet, Meta Platforms, Microsoft, NVIDIA and Tesla) are expected to post combined earnings growth of 53.7% in Q4 2023. Meanwhile, the remaining 494 S&P500 companies are expected to post a 10.5% earnings decline in Q4 2023.

As can be seen in the chart below, the Information Technology sector is also the best of eleven S&P500 sectors so far in terms of EPS beating expectations in Q4 2023, while Communication Services is the worst.

Source: Factset Earnings Insight

The table below shows 24 major US companies that reported quarterly results for Q4 2023 last week, along with the actual and expected EPS, the percentage deviation and the post-announcement price movement. The average EPS surprise is 8.9% and the median is 4.9% for twelve reporting companies since 1 January 2024. The post-announcement price movement is minus 0.3% on average and minus 0.3% on median.

Below we have listed the market’s earnings per share expectations for each company and the date of each interim report for the coming week.

OMX stocks in Sweden

Carlsquare has compiled results, revenues and order intake (only a few companies) compared to expectations for 24 major OMX companies that have submitted their Q4 2023 reports so far. As can be seen, 63% of Q4 results were better than expected, but only 46% of Q4 revenues. Four out of six companies reported lower than expected new orders.

Sources: Avanza, Bloombergs, Carlsquare, Direkt och Infront.

The following table shows the deviation (in percent) of the earnings, sales and order intake results of the 24 OMX companies that have reported their Q4 2023 results compared to the corresponding consensus estimates.

Week Ahead

Reports on Wednesday, 31 January: SKF, AtriumLjungberg, Holmen, SSAB, H&M, Hemnet, Loomis, DNB, Novo Nordisk, Wärtsilä, Boeing, Qualcomm, Mastercard, Thermo Fisher Scientific, Boston Scientific, Automatic Data Processing and Samsung.

Japanese industrial production and retail sales for December are due at 0.50 CET, as well as the minutes of the Bank of Japan’s policy meeting on 23 January. China’s PMI for January are due at 2.30 CET. At 8.00 CET, Germany will release retail sales and import prices for December, and later in the day we will get CPI for January from France and Germany. Germany’s January unemployment rate is due at 9.55 CET. Canada’s GDP for November is due at 14.30 CET. The United States will contribute with ADP private employment for January, labour costs for Q4, Chicago PMI for January and oil inventories (DOE). Later in the evening, the Fed will make its interest rate announcement, due at 20.00 CET.

Reports on Thursday, 1 February: ABB, Axfood, Volvo Cars, ELUX Pro, Evolution, Indutrade, Stora Enso, Getinge, Hexagon, Kinnevik, Munters, UPM, Stolt-Nielsen, Cargotec, DSV, Novozymes, Deutsche Bank, Apple, Amazon, Honeywell International, Illinois Tool Works, Merck och Meta Platforms.

This Thursday is dominated by industrial PMIs from China, India, Sweden, Spain, Italy, France, Germany, the eurozone, the UK and the US. The eurozone and Italy will publish CPI for January and the eurozone also unemployment for December. Interest rate announcements are made by the Swedish Riksbank and the Bank of England. From the United States, we will get the Challenger layoff statistics for January, Q4 productivity, initial jobless claims and January construction spending.

Reports on Friday, 2 February:  Afry, Husqvarna, Lifco, Trelleborg, Electrolux, Peab, Vitrolife, Addlife, Addnode, Danske Bank, Konecranes, AbbVie, Bristol Myers Squibb, Caterpillar, Chevron, Exxon Mobil, and Regeneron Pharmaceuticals.

French industrial production for December is due at 8.45 CET. From the United States, we get January employment and Michigan index and December industrial orders.

Reports on Monday, 5 February:  Nordea, Chemotec, Vodafone, McDonald’s and Vertex Pharmaceuticals.

Monday’s macroeconomic calendar is dominated by the January Services PMIs from China, Sweden, Spain, Italy, France, Germany, the Eurozone, the UK and the US. We also get the German trade balance for December, the Eurozone Sentix investor confidence for February and the Eurozone PPI for December.

Reports on Tuesday, 6 February: Alfa Laval, Nolato, Lagercrantz, Demant, Nokian Renkaat, Nordic Semiconductor, BP, UBS, Amgen, Eli Lilly, FiServ, Ford, Gilead Sciences, Snap, Spotify, Nintendo and Toyota. Norwegian traffic figures for January 2024 are due at 8.00 CET.

Japanese household consumption for December is due at 0.30 CET. Statistics Sweden’s services price index for Q4 20/23 is published at 8.00 CET, at the same time as Germany’s industrial orders for December. Eurozone retail sales for December are due at 11.00 CET. From the United States, we get the weekly Redbook retail sales data and the weekly oil inventories statistics (API).


The information in this presentation is based on what the publisher, Carlsquare, believes to be reliable sources. However, we cannot guarantee its content. Nothing in the presentation should be construed as a recommendation or solicitation to invest in any financial instrument, option, or the like. Opinions and conclusions expressed in the presentation are for the recipient’s use only. The contents may not be copied, reproduced, quoted, or distributed to anyone else. Carlsquare shall not be liable for any loss arising from any decision taken based on the information contained in this presentation. Past performance should not be taken as an indication of future results. Changes in foreign exchange rates may affect the value, price or income of an investment made abroad or in a foreign currency.

The analysis is not directed at U.S. Persons (as that term is defined in Regulation S under the United States Securities Act and interpreted in the United States Investment Companies Act of 1940), nor may it be distributed to such persons. The analysis is not intended for natural or legal persons where the distribution of the analysis to such persons would involve or entail a risk of violation of Swedish or foreign laws or regulations.




Carlsquare weekly market letter: Follow the wind!