Market Summary – February 5, 2024

Last Week’s Summary

  • S&P 500 Index rose 1.41%
  • International Equities rose 0.09%
  • Emerging Markets rose 0.32%
  • U.S. 10-Year Treasury Yield rose to 4.15%
  • Initial Jobless Claims rose to 224k
  • FOMC Rates remained at 5.25%-5.50%
  • Nonfarm Payrolls rose to 353k
  • Unemployment Rate stayed at 3.7%

What to Watch for This Week

  • M, 2/5/24 S&P Global U.S. Services PMI
  • W, 2/7/24 Trade Balance, MBA Mortgage Applications
  • Th, 2/8/24 Initial Jobless Claims, Continuing Claims
  • F, 2/9/24 CPI Revisions

Weekly Market Recap

The stock market continued its upward trajectory this week, fueled by a robust performance in big tech companies and a positive jobs report that bolstered confidence in corporate profits.

Equities reached unprecedented heights, with the S&P 500 edging closer to the 5,000 mark and the Nasdaq 100 experiencing a 1.7% surge, driven by optimistic outlooks from Meta Platforms Inc. and Inc. Amidst the prevailing economic optimism, the Federal Reserve’s hesitancy to reduce interest rates contributed to the market’s intra-week volatility.

Two-Year Treasury Yields saw a significant 16 basis points increase, reaching 4.36%. Nonfarm payrolls displayed substantial growth, surging by 353,000 last month after upward revisions for the preceding two months, while the unemployment rate remained steady at 3.7%. Concurrently, separate data revealed a sharp increase in U.S. consumer sentiment and an increased likelihood of a ‘no-landing’ scenario.

Post the Federal Reserve’s decision on Wednesday, Chairman Jerome Powell conveyed that a rate cut is unlikely at the upcoming March meeting. This sentiment was reflected in swap contracts tied to the March Fed meeting date, with the odds of a quarter-point rate cut halving to approximately 15%. Moreover, the May contract no longer fully priced in a cut, a departure from its stance over the past month.

Meta Platforms Inc., following an impressive earnings report, witnessed a remarkable surge of over 20% to a record high on Friday. The company announced not only strong earnings but also its inaugural quarterly dividend and a substantial $50 Billion share buyback program.

Notably, with tech stocks dominating the market in the first month of the year, it’s crucial to acknowledge that the Magnificent Seven contributed to 45% of the S&P 500’s January return.

Download Market Snapshot February 5, 2024

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