Market Summary – January 22, 2024

Last Week’s Summary

  • S&P 500 Index rose 1.19%
  • International Equities fell 2.15%
  • Emerging Markets fell 2.54%
  • U.S. 10-Year Treasury Yield rose to 4.12%
  • Initial Jobless Claims fell to 187k
  • U. of Mich. Sentiment rose to 78.8
  • U. of Mich. 1-Yr. Inflation fell to 2.9%

What to Watch for This Week

  • M, 1/22/24 Leading Index
  • T, 1/23/24 Richmond Fed Manufac. Index
  • W, 1/24/24 MBA Mortgage Applications, S&P Global US Manufacturing Index
  • Th, 1/25/24 GDP, Initial Jobless Claims, Core PCE Price Index
  • F, 1/26/24 Personal Income, Personal Spending, Core PCE Deflator

Weekly Market Recap

Wall Street wrapped up the week on a positive note, witnessing stocks reaching unprecedented heights amidst speculations that the Federal Reserve will initiate rate cuts within the year, thereby enhancing the prospects for Corporate America.

The S&P 500 recorded a 1.2% gain and set a new high closing above 4,800. The Nasdaq 100 outperformed, with Advanced Micro Devices Inc. achieving a record high and Nvidia Corp. leading mega-caps to further gains. Treasury 10-Year Yields remained relatively stable throughout the period.

Notably, in January, Nvidia, Microsoft Corp., and Meta Platforms Inc., all part of the “Magnificent Seven” cohort, emerged as the top contributors to point gains in the S&P 500. Investors closely monitored statements from policymakers, who spoke just hours before the Fed’s traditional pre-meeting communications blackout period.

Three Fed officials emphasized that their decision on rate cuts would be guided by incoming data and clarified that they have not yet witnessed sufficient evidence to commence easing. Traders adjusted their expectations for rate cuts as recent U.S. economic data exhibited resilience, coupled with the Fed’s emphasis on ensuring inflation is under control before considering any cuts.

Presently, markets are pricing in approximately 1.4 percentage points of reductions for the year, a slight moderation from expectations as high as 1.7 percentage points of easing just last week.

As the week unfolds, corporate earnings take center stage, with financials concluding and tech companies, including notable names like Netflix and Tesla, commencing their reporting.

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