Market Summary – December 26, 2023

Last Week’s Summary

  • S&P 500 Index rose 0.77%
  • International Equities rose 0.52%
  • Emerging Markets fell 0.78%
  • U.S. 10-Year Treasury Yield fell to 3.89%
  • GDP fell to 4.9%
  • Initial Jobless Claims rose to 205k
  • U. of Mich. Sentiment rose to 69.7
  • U. of Mich. 1-Yr. Inflation stayed at 3.1%

What to Watch for This Week

  • T, 12/26/23 Chicago Fed Nat Activity Index
  • W, 12/27/23 Richmond Fed Manu. Index
  • Th, 12/28/23 Initial Jobless Claims, Continuing Claims
  • F, 12/29/23 MNI Chicago PMI

Weekly Market Recap

Financial markets experienced another positive week, with various asset classes, including stocks and bonds, registering gains. The prevailing sentiment on Wall Street was reinforced by data releases, solidifying expectations of early and substantial rate cuts in the upcoming year. Stocks initially rallied on Friday, buoyed by data indicating that the Federal Reserve’s preferred measure of underlying inflation barely increased in November.

Despite a choppy low-volume session preceding the Christmas holiday, the S&P 500 achieved an Eight-Week winning streak, marking its longest stretch of success in over five years. This rally was underpinned by indications that price pressures in the United States were showing signs of easing. The Nasdaq 100 and a Global Equity Index also logged impressive runs, with the Nasdaq achieving its lengthiest winning streak since July 2021. U.S. bonds continued their positive momentum, securing a fourth consecutive week of gains, marking their best performance since March.

However, on Friday, the S&P 500 only rose by a modest 0.2%, as a decline in Apple Inc.’s shares exerted downward pressure on equity indices. Nike Inc., which plummeted by 12% on Friday, following the sports apparel maker’s announcement of a weaker sales outlook and a cost-cutting plan. A notable event occurred on Wednesday when a late-day market downturn was attributed to the impact of so-called Zero-Day, or ODTE, options.

Some market participants on Wall Street are positioning themselves for further stock gains as the session kicks off the anticipated “Santa Claus rally,” a seasonal trend where equities tend to climb into the first few days of the new year. With the Christmas holiday marking the beginning of the final trading week of the year, markets are closed, and there are few significant news releases scheduled for the upcoming week.

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