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1/16/24 Weekly Market Commentary

1/16/24 Weekly Market Commentary

January 16, 2024

What happened last week…         

Stocks rebounded with the performance of the three major indices as follows: DJIA (0.34%), S&P 500 (1.84%), NASDAQ (3.09%). Year-to-date, the S&P 500 has gained 0.29%.

 

Congress is again faced with the possibility of a government shutdown if, at the very least, a short-term funding bill is not passed before funding for some federal agencies runs out on January 19 while others expire on February 2. Previously, a short-term bill was passed in November to avoid a shutdown. Congressional leaders announced a $1.66 trillion spending deal that includes $886 billion for defense and $772 billion for non-defense spending, but the appropriations bills still need to be agreed upon.

 

Johnson & Johnson (JNJ) will acquire for $2 billion in cash Ambrx Biopharma (AMAM), a “a clinical-stage biopharmaceutical company with a proprietary synthetic biology technology platform to design and develop next-generation antibody drug conjugates.” The deal is expected to close in the first half of 2024.

 

The inflation rate year-over-year for December landed higher than expectations (3.2%) as it increased to 3.4% from 3.1%, which was the highest reading since September (3.7%) but still far below the peak rate of 9.1% that was reported in June 2022. Meanwhile, the core inflation rate year-over-year for December also landed higher than expectations (3.8%) but decreased to 3.9% from 4.0%. It is the lowest reading since May 2021 (3.8%).

 

According to FactSet, as of January 12, 6% of S&P 500 companies have reported earnings with 76% having a positive EPS surprise and 55% having a positive revenue surprise. The blendedearnings decline for the S&P 500 is -0.1%, which would be the fourth time in the past five quarters the index reported a year-over-year decline. The blended revenue for the index is 2.8%, which would be the 12th straight quarter of growth. As of January 5, for Q4 2023, the estimated earnings growth rate for the S&P 500 was 1.3%. Meanwhile, the estimated revenue growth for the S&P 500 was 3.1%. For the prior quarter of Q3 2023, the S&P 500 saw earnings growth of 4.9% and revenue growth of 2.4%.

 

The following companies reported earnings last week: JPM, UNH. 

 

Happening this week…


On Friday, existing home sales for December are expected to remain at 3.82 million, which was the first monthly increase since May.


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.