Stocks retreated in the first trading week of 2024, struggling a bit after a celebratory end to last year as investors second-guessed Fed signals and fretted over lingering inflation concerns.
New Year Blues
Stocks got off to a rough first week of the new year, with tech names leading the week’s decline. Several market observers called it the “reverse Goldilocks” effect, where the market decided investors were getting a little too excited over the prospect of a Fed rate cut.
Stocks bounced up and down each of the four trading days but ended each one down—except Friday, when the Dow Industrials, Nasdaq Composite, and S&P 500 all ended the day in the green when jobs data helped soften the week’s slide.1,2
All About the Fed
On Wednesday, manufacturing news came in better than expected, lifting markets until the December Federal Open Market Committee meeting minutes were released, revealing that the Fed members had discussed rate cuts for 2024 but in no specific terms.
Jobs and services sector news painted a better picture of the economy on Thursday, but as the 10-year Treasury hit 4%, stock prices responded negatively.
| Source: YCharts.com, January 6, 2024. Weekly performance is measured from the close of trading on Friday, December 29, to Friday, January 5, close. Treasury note yield is expressed in basis points. |
Jobs Data in Focus
Finally, employment data helped buffer the week on Friday, as employers added 216,000 new jobs in December, besting estimates from economists and surpassing the 173,000 jobs added in November. News of unemployment remaining steady at 3.7% also helped sentiment.3,4
This Week: Key Economic Data
Tuesday: International Trade in Goods.
Wednesday: EIA Petroleum Status Report.
Thursday: Jobless Claims. Consumer Price Index. Treasury Statement.
Friday: Producer Price Index.
Source: Investor’s Business Daily, Econoday economic calendar; January 5, 2024
The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.
This Week: Companies Reporting Earnings
Monday: Jefferies Financial Group (JEF)
Tuesday: Albertsons Companies (ACI)
Wednesday: KB Home (KBH), Rite Aid Corporation (RADCQ)
Thursday: Infosys (INFY)
Friday: UnitedHealth Group Inc (UNH), JP Morgan Chase & Co (JPM), Bank of America Corporation (BAC), Wells Fargo & Co (WFC)
Source: Zacks, January 5, 2024
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.
1. The Wall Street Journal, January 5, 2024
2. The Wall Street Journal, January 5, 2024
3. The Wall Street Journal, January 5, 2024
4. The Wall Street Journal, January 5, 2024
5. IRS.gov, September 6, 2023
6. Livesimplynatural.com, October 9, 2023
Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost.
The forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice.
The market indexes discussed are unmanaged, and generally, considered representative of their respective markets. Index performance is not indicative of the past performance of a particular investment. Indexes do not incur management fees, costs, and expenses. Individuals cannot directly invest in unmanaged indexes. Past performance does not guarantee future results.
The Dow Jones Industrial Average is an unmanaged index that is generally considered representative of large-capitalization companies on the U.S. stock market. Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of technology and growth companies. The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) and serves as a benchmark of the performance of major international equity markets, as represented by 21 major MSCI indexes from Europe, Australia, and Southeast Asia. The S&P 500 Composite Index is an unmanaged group of securities that are considered to be representative of the stock market in general.
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