Aurelia Butler

NEW YORK (Reuters) – U.S. stock bulls are taking heart from a range of market signals pointing to an upbeat year for Wall Street, as equities sit on impressive gains despite worries that the Federal Reserve’s monetary policy tightening may plunge the economy into a recession. Among these are equities’ positive January performance, a “golden cross” chart pattern on the S&P 500 and more stocks making new highs rather than new lows.Such signals are far from the only indicators market participants use to make investment decisions, and they are not foolproof. Weak outlooks for corporate heavyweights such as Amazon (NASDAQ:AMZN) and Microsoft (NASDAQ:MSFT) and a blowout employment number that heightened expectations for Fed hawkishness injected a fresh note of uncertainty into markets on Friday, though the S&P 500 remains up 7.7% year-to-date.However, steady improvements in gauges of momentum and sentiment in recent weeks reinforced the view among some investors that asset prices may be heading for a more benign period, after last year saw the S&P 500 lose 19.4% in its biggest annual percentage drop since 2008.“We think this is a healthy picture that is being painted here,” said Ryan Detrick, chief market strategist at the Carson Group, referring to signals such as January’s gains and the broad range of sectors participating in the rally.JANUARY JUMPThe S&P 500 rose 6.2% in January, driven in part by hopes that the Fed will be able to contain surging inflation without badly damaging the economy.When the S&P 500 has advanced in January, the market has gone on to rise in the subsequent February-December period 83% of the time, with an average 11-month gain of over 11%, according to an analysis of data going back to World War II by CFRA Research.An up January after a down year, however, was followed by a gain of 23.1% from February to December with a 92% success rate. Despite a recent rally that may have made stocks comparatively expensive, “the track record implies that maybe we do have some upside potential,” said Sam Stovall, chief investment strategist at CFRA Research.GOLDEN CROSS Meanwhile, chart watchers noted that the S&P 500’s 50-day moving average rose above its 200-day moving average on Thursday, a pattern known as a golden cross.Since 1950, the S&P 500 has produced an average 12-month return of 10.5% after a golden cross formed, while the overall average annual return since 1950 is 9.1%, according to Adam Turnquist, chief technical strategist at LPL Research.However, when a golden cross has appeared as the 200-day moving average is declining – as it is now – the average 12-month return for the S&P 500 jumps to 16.8%.”The recent golden cross adds to the growing technical evidence of a trend change for the S&P 500 and further raises the probabilities of the bear market low being set in October,” Turnquist said in a post.IMPROVING INTERNALSWillie Delwiche, an investment strategist at All Star Charts, said all five indicators on his bull market checklist were fulfilled in January, including upside volume and risk appetite metrics, something that did not occur once in 2022.One of those indicators showed more stocks on the New York Stock Exchange and Nasdaq making new 52-week highs than lows — — a sign that the rally is being led by a broad range of stocks, rather than a cluster of heavyweights. That happened as many times in January as it did during all of 2022, Delwiche said. However, some investors believe stocks may have gotten ahead of themselves.Friday’s data showing U.S. employment growth accelerating sharply in January renewed the inflation concerns that hammered stocks last year and ignited bets on a more hawkish Fed. “The January employment report was unambiguously strong and should be the start of a series of data points showing stronger activity and inflation in early 2023,” analysts at Citi wrote. “We expect this emerging trend should push back on too-dovish market pricing.” More

NHS workers in Wales have called off a strike on Monday after the Cardiff government raised its pay offer, increasing pressure on prime minister Rishi Sunak to follow suit ahead of the biggest-ever week of walkouts by staff in England.The GMB union and the Royal College of Nursing said on Friday that they had suspended the planned industrial action following a revised pay deal from the Welsh government. The new offer consists of an extra 3 per cent, of which 1.5 per cent will be consolidated and the rest a non-consolidated, one-off payment. It will be backdated to April 2022 and comes on top of a £1,400 increase already awarded to health workers in line with pay review body recommendations. The Welsh government’s move will add to pressure on Sunak to boost NHS pay in England, ahead of what is set to be the largest week of strike action in the history of the health service.Five unions have called or are organising walkouts expected to involve thousands of ambulance staff, nurses and physiotherapists.Professor Sir Stephen Powis, NHS England medical director, said on Saturday that next week was likely to be the most disruptive week of strikes to date. “While local services have worked hard to minimise impact for patients, the scale of action means increased disruption is inevitable,” he added. Meanwhile, Matthew Taylor, head of the NHS Confederation, which represents health groups across the country, said the service faced “a hugely disruptive week for patients” and urged ministers “to take the first step and find a resolution to this deadlock with the unions”.Although earlier this month Sunak did not rule out one-off payments for NHS workers in England, he has repeatedly argued against raising public sector pay. He has said that any increase risks worsening inflation, which in December stood at 10.5%. Health secretary Steve Barclay last month signalled to unions that he would examine the case for backdating this year’s pay rise. But in recent days the UK government has reiterated its commitment to focusing on pay talks for the forthcoming 2023-24 financial year, rather than reopening or altering the agreed recommendations for 2022-23. In an interview with Piers Morgan on Talk TV on Thursday, Sunak said: “I would love to give nurses a massive pay rise. Who wouldn’t? Certainly that would make my life easier, wouldn’t it?”“It’s about choices. So right now, money going into the NHS [is the] biggest it’s ever been, but we have to put that in lots of different places. We need to hire more doctors, more nurses. We need more scanning equipment so we can detect cancers.”Thanking the unions for “constructive” talks, Wales’s health minister Eluned Morgan said she hoped the pay award would go “some way to recognise their hard work”. But she added: “Without additional funding from the UK government, there are inevitably limits to how far we can go in Wales.”RCN general secretary Pat Cullen said Cardiff’s decision left Sunak with “no place to hide”, adding: “If the other governments can negotiate and find more money for this year, the prime minister can do the same.” Nathan Holman, GMB Welsh NHS lead, described the outcome of the “intense negotiations” as “a lesson for those in charge on the other side of the Severn Bridge”.The strike, which was announced in January, by the GMB and RCN in Wales would have involved about 1,500 ambulance workers and seen nurses walk out for 12 hours. Unite the union said its ambulance members in Wales would go ahead with strikes on February 6 because talks were “continuing”. “It would be wholly premature for Unite to talk about any deals being done in relation to the Welsh ambulance dispute,” said general secretary Sharon Graham. “Unite will be available all weekend in the hope that a satisfactory offer can be put together to avert strikes next week.” More

Consumer prices are seen rising by an annual rate of 97.6% in 2023, according to the analyst poll commissioned by the Argentine monetary authority (BCRA), compared to last year’s rate of 94.8%.The bank’s latest REM survey compares to a December forecast of a 98.4% inflation rate by the end of this year.The government of embattled President Alberto Fernandez sees creeping annual inflation for 2023 significantly lower, at just 60%, according to a budget projection.The survey’s inflation forecast sees some relief by 2024, however, with prices rising by 79.6%, but up from its previous estimate of 75%.Suffering through a prolonged economic crisis marked by a massive debt load, chronic deficit spending and the steady erosion of the local peso currency, Argentines live with one of the world’s highest inflation rates, second only to Venezuela in Latin America.Earlier this week, the BCRA announced it will roll out a new 2,000-peso bill, double the face value of its largest current bank note.The analysts surveyed expect January’s inflation rate to come in at 5.6%. The monthly rise in prices last December stood at 5.1%, according to the official IPC price index.Expectations of economic growth this year remain unchanged at 0.5%, according to the survey, while the official exchange rate is seen ending the year at 327.75 per U.S. dollar.That would mark a 74% weakening of the tightly controlled official exchange rate, compared to its current value of about 188 pesos per greenback.The REM survey interviewed 40 experts from Jan. 27-31, including consultants, financial institutions and research centers. More