Market Summary – January 16, 2024

Last Week’s Summary

  • S&P 500 Index rose 1.87%
  • International Equities rose 0.38%
  • Emerging Markets fell 0.57%
  • U.S. 10-Year Treasury Yield fell to 3.93%
  • Initial Jobless Claims fell to 202k
  • CPI rose to 3.4%; CPI Core fell to 3.9%
  • PPI rose to 1.0%; PPI Core fell to 1.8%

What to Watch for This Week

  • T, 1/16/24 Empire Manufacturing
  • W, 1/17/24 MBA Mortgage Applications, Industrial Production
  • Th, 1/18/24 Housing Starts, Initial Jobless Claims
  • F, 1/19/24 U. of Mich. Sentiment

Weekly Market Recap

On Friday, the S&P 500 remained largely unchanged but secured a weekly gain. In a noteworthy shift, Microsoft Corp. surpassed Apple Inc. to claim the title of the world’s most valuable publicly traded company. Following the robust Fourth-Quarter surge in U.S. stocks, investor focus has pivoted towards companies’ earnings performance.

Two-Year Treasury Yields reached their lowest since May following an unexpected decline in producer prices, reinforcing expectations of Federal Reserve rate cuts in the coming year. Traders are now pricing in an approximately 80% likelihood of a Fed reduction in March, up from just over 50% a week earlier.

Friday’s economic data, following a higher-than-expected reading on consumer prices, highlighted the challenges officials face in steering inflation toward the 2% target, with inflation slightly rising to 3.4%. As the U.S. earnings season commenced, investors analyzed bank results. Some major Wall Street banks signaled the end of a record revenue streak.

Wells Fargo & Co. surprised analysts by projecting a 9% decrease in net interest income for 2024, while Citigroup Inc. anticipated a modest drop in the current year. Even JPMorgan Chase & Co., while expecting its 2024 earnings to hold steady at 2023 levels, foresees a decline over the course of the year.

Looking forward to the shortened holiday week ahead with the markets closed Monday for observance of the Martin Luther King Jr. Holiday, traders will continue to analyze earnings as they unroll, however there are no significant economic releases scheduled for the week ahead.

Lastly, oil prices rose following U.S. and allied airstrikes against Houthi rebels in Yemen as tensions continue to rise in the region.

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