Sooooo, what do we think about the stock market now?  Well, we have been bullish of stocks after identifying the downturn from early-October 2018 into the December 24, 2018 low, where we said “buy ‘em!”  That said, we think stocks will rally into the new year, but in mid-to-late January the stock market will have to deal with slowing GDP numbers.  It is not the Boeing employees that are going to be laid off, and slow the economy, but rather the supply-chain companies that are going to be affected.  Last week we talked with a parts supplier to Boeing’s 737max who told us that if the 737max does not get recertified in three months, they are “out of business.”  Ladies and gentlemen, this is a big deal in the supply-chain, and nobody is talking about it.

Eoin Treacy's view

Here is a link to the full report and here is a section from it:

Sooooo, what do we think about the stock market now?  Well, we have been bullish of stocks after identifying the downturn from early-October 2018 into the December 24, 2018 low, where we said “buy ‘em!”  That said, we think stocks will rally into the new year, but in mid-to-late January the stock market will have to deal with slowing GDP numbers.  It is not the Boeing employees that are going to be laid off, and slow the economy, but rather the supply-chain companies that are going to be affected.  Last week we talked with a parts supplier to Boeing’s 737max who told us that if the 737max does not get recertified in three months, they are “out of business.”  Ladies and gentlemen, this is a big deal in the supply-chain, and nobody is talking about it.

It’s all about the consumer. If the consumer is working, they are spending and that helps to keep the economy chugging along. Therefore, unemployment rates remaining well contained are one of the primary factors in ensuring growth remains on an upward slope. 

As mentioned previously Boeing as evolving type-3 top formation characteristics and really needs to hold the $325 level if support building is to be given the benefit of the doubt.

Amazon continues to range with a mild upward bias but below the trend mean. Considering the relative strength exhibited by other constituents of the FAANG grouping Amazon is a clear standout for its underperformance. It needs to sustain a move back above the trend mean to signal a return to demand dominance.

Darden Restaurants, with a focus on reasonably priced menus, bounced from the region of the trend mean repeatedly between 2014 and the middle of 2019. It encountered resistance in the region of the trend mean earlier this month and hit a new reaction low today. A clear and a sustained move above the trend mean will be required to question type-2 top formation completion characteristics.

The big question for investors in 2020 will be how well the Fed’s return to stimulus will cushion the pressure some portions of the consumer sector are feeling.