Stocks closed a winning week Friday following data that pointed to stronger than expected U.S. economic growth. The Commerce Department said Friday the personal consumption expenditures price index excluding energy and food showed prices rose 4.4% from a year earlier, a day after reporting a better than expected 2.9% gain in gross domestic product for the fourth quarter, boosting hopes that the Federal Reserve may manage a soft landing. All the major market averages finished higher for the week. From tech side of analysis, SPX already breaks 4000ish slopping resistance, but a little bit extended from 8&21 EMAs (also 4100ish short term resistance level),3880ish short support become a level we can trust in short-term.
For next week, the question of how to play the economic reopening in China is becoming more interesting with mobility and traffic measures in the nation flashing very strong for the Chinese New Year holiday as consumers move back out into the streets. Some analysts see the China reopening as still being in the early innings, with as much as $1T in excess household savings ready to support consumption and growth.
Investors have been snapping up some China reopening stock plays already on the view the China market could outperform the U.S. in the near term. In the retail sector, some of the obvious beneficiaries that have already rallied include Luckin Coffee (
LKNCY
), up 60% since November, and Yum China (
YUMC
) with a 30% pop. However, Wells Fargo sees many opportunities still left for investors with the consumer momentum just getting started. Of note, luxury players like Swatch (
SWGAY
), Burberry (
BURBY
), and Richemont (
CFRHF
) have all pointed to strong traffic trends in January.
From tech side of analysis, I am expecting SPX to correct back to 8&21 EMAs (time correction) possibly somewhere around 4000ish, if the market can hold up 4000ish, it may try to break up 4100ish again.
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