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1/08/24 Weekly Market Commentary

1/08/24 Weekly Market Commentary

January 08, 2024

What happened last week…         

The three major indices saw their respective nine-week winning streaks end to kick off the new year with weekly performances as follows: DJIA (-0.59%), S&P 500 (-1.52%), NASDAQ (-3.25%). Notably, all three indices finished in the green on Friday. The streak of weekly gains was the longest for the S&P 500 since 2004 and the longest such streak for the DJIA and NASDAQ since 2019.

 

The Federal Reserve released meeting minutes from its December gathering where interest rates remained at 5.25% to 5.50% for the third straight time. According to the minutes, “In discussing the policy outlook, participants viewed the policy rate as likely at or near its peak for this tightening cycle, though they noted that the actual policy path will depend on how the economy evolves.” Regarding the potential for a reduction in rates the minutes noted, “In their submitted projections, almost all participants indicated that, reflecting the improvements in their inflation outlooks, their baseline projections implied that a lower target range for the federal funds rate would be appropriate by the end of 2024.” Projections from the last meeting indicate there could be three quarter-point rate cuts this year, with the first cut coming potentially as soon as March. The next Federal Open Market Committee meeting takes place on January 30-31.

 

The ADP employment change beat expectations (130,000) as it increased to 164,000 from the downwardly revised 101,000 (from 103,000). The unemployment rate landed lower than expectations (3.8%) as it remained at 3.7%. Nonfarm payrolls beat expectations (170,000) as it increased to 216,000 from the downwardly revised 173,000 (from 199,000). Average hourly earnings month-over-month landed higher than expectations (0.3%) as it remained at 0.4%.

 

The manufacturing PMI for December beat expectations (47.1) as it increased to 47.4 from 46.7, which marks the 14th straight contractionary reading (below 50).

 

Tesla (TSLA) released its vehicle production and deliveries for Q4 2023 which reported 494,989 produced and 484,507 delivered. For all of 2023, total production was 1,845,985 and total deliveries were 1,808,581. On an annual basis, production grew 35% year-over-year and deliveries grew 38% year-over-year.


Happening this week…

The following companies report earnings this week: JPM, UNH.

 

The inflation rate year-over-year for December is expected to increase to 3.2% from 3.1%, which was the lowest reading in five months and far below the peak rate of 9.1% that was reported in June 2022.


Thanks for Reading!

- The Rockline Team


The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services. LPL Financial doesn’t provide research on individual equities.

Dow Jones Industrial Average is comprised of 30 stocks that are major factors in their industries and widely held by individuals and institutional investors. The Dow Jones Industrial Average is comprised of 30 stocks that are major factors in their industries and widely held by individuals and institutional investors.

NASDAQ Composite Index measures all NASDAQ domestic and non-U.S. based common stocks listed on The NASDAQ Stock Market. The market value, the last sale price multiplied by total shares outstanding, is calculated throughout the trading day, and is related to the total value of the Index.

S&P 500 Index is a capitalization weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.