Day Traders Diary

01/09/23

The major averages closed mixed with the Dow falling 112 points or 0.34% while the S&P 500 closed just 3 points while the Nasdaq rose 66 points or 0.6%, pushed up by a nearly 6% rally in Tesla stock.

The Dow Jones did rally as much as 300 points after 700 point rally on Friday, but gave up all the gains as drug stocks, Merck and Johnson & Johnson weighed on the index.

Monday marks the fifth trading day of 2023, reminding investors of a classic Wall Street rule that suggests the market will end the year up if stocks perform well in the first five sessions. The S&P 500 has ended the year positive 83% of the times it ended the first five trading sessions up — and with an average gain of 14%, according to the Stock Trader's Almanac.

That follows a winning shortened week for the three major indexes, with the Dow and S&P 500 posting their best weeks since November. A chunk of those gains came Friday on the back of labor and service sector data that spurred hopes the economy was contracting enough to appease the Federal Reserve.

Later in the week, investors will watch for December's consumer price index report coming Thursday and big bank earnings scheduled for Friday.

Goldman Sachs added Alibaba to his conviction buy list, saying the tech stock is the best way to play a rebound in the China internet sector.

"We see Alibaba at 11X 2023 adj. P/E as the best value stock proxy to enjoy advertising recovery, fintech (via. 33%-owned Ant) and cloud structural growth, add to CL as we believe the worst is behind us after two years of downward earnings revisions with the largest room for valuation multiple repair amongst the mega-caps as its top line growth resumes and 2022-25E earnings resume to mid-teens growth," Analyst Ronald Keung wrote in a Monday note.