- The US may hit its debt ceiling this Thursday if Congress does not act. The national debt has grown substantially and is 120% of GDP today compared to 106% in 2019. The last time Congress did not raise the debt ceiling in 2011 the S&P 500 dropped 6.6%.
- At the height of the tech bubble in the early 2000s, the technology sector never generated more than 14% of the S&P 500’s total earnings. Today, however, technology accounts for 21% of S&P 500 earnings.
- Although the economy is slowing, social security payments may decrease the pain for everyday Americans. Social Security payments, which go out to nearly 30% of the adult population, will rise by close to 9% this year, as they are indexed to inflation.
- Europe's STOXX 600 index has gained 17% since the end of the third quarter in 2022, versus only an 11% gain for the U.S. S&P 500. This is partially because the tech sector amounts to 26% of the S&P 500, while tech is only about 7% of the STOXX 600.
Barrons- "Government Debt Could Be a Big Problem for the Stock Market"
The Irrelevant Investor- "Animal Spirits: What's the Negative Catalyst?"
Barrons- "The Age of Free Money Is Over. But There Are Still Opportunities, Investing Pros Say."
Reuters- "Wall St Week Ahead: U.S. Investors Hunt for Gains in Foreign Stocks"
Economic Calendar
Monday:
None scheduled. Martin Luther King Jr. Day
Tuesday:
Empire state manufacturing index (Jan)
Wednesday:
Retail sales (Dec), Retail sales ex motor vehicles (Dec), Producer price index, final demand (Dec), Industrial production (Dec), Capacity utilization (Dec), NAHB home builders' index (Jan), Business inventories (revision) (Nov), Beige Book
Thursday:
Initial jobless claims (Jan), Continuing jobless claims (Jan), Building permits (SAAR) (Dec), Housing starts (SAAR) (Dec), Philadelphia Fed manufacturing index (Jan), Fed Vice Chair Lael Brainard speaks
Friday:
Existing home sales (SAAR) (Dec), Fed Gov. Christopher Waller speaks at Council on Foreign Relations
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