12/26/23 Weekly Market Commentary

12/26/23 Weekly Market Commentary

December 26, 2023

What happened last week…         

The three major indices extended their winning streaks to eight consecutive weeks with last week’s performances as follows: DJIA (0.22%), S&P 500 (0.75%), NASDAQ (1.21%). It is the first eight-week win streak for the S&P 500 since 2017 and the first for the DJIA since 2019. Furthermore, from Friday’s close, the S&P 500 is 0.9% off from its record close and 1.3% off from its intraday record high. Year-to-date, with one final (shortened) week to go, the indices have performed as follows: DJIA (12.79%), S&P 500 (23.83%), NASDAQ (43.25%).

 

Adobe (ADBE) and Figma terminated their proposed $20 billion merger in which Adobe would have acquired the cloud-based design company. The mutual decision came as it was determined there was “no clear path to receive necessary regulatory approvals from the European Commission and the UK Competition and Markets Authority.” Adobe will pay Figma a $1 billion breakup fee. The scrutiny behind large acquisitions and concerns over anticompetitive practices has been a recurring theme this year with companies such as Meta Platforms (META) and Microsoft (MSFT) seeing regulatory challenges on large acquisitions and the filing of antitrust lawsuits against Alphabet (GOOG) and Amazon (AMZN).

 

The GDP growth rate (final estimate) for Q3 2023 landed below expectations (5.1%) as it decreased to 4.9% compared to the 5.2% rate from the previous reading. The current rate is the strongest reading since Q4 2021 and is more than double the 2.1% growth rate seen in Q2 2023.

 

Existing home sales for November beat expectations (3.77 million) as it increased to 3.82 million from 3.79 million, which snaps a streak of five straight monthly declines and rises from the lowest reading since August 2010 (3.68 million). New home sales for November missed expectations (685,000) as it decreased to 590,000 from the downwardly revised 672,000 (from 679,000), making it the lowest reading since November 2022 (582,000).

 

According to FactSet, as of December 18, for Q4 2023 the estimated earnings growth rate for the S&P 500 is 2.4%, which would be the second straight quarter of year-over-year growth. Meanwhile, the estimated revenue growth rate for the quarter is 3.1%, which would be the 12th straight quarter of growth for the index. For CY 2023, the S&P 500 is expected to see earnings growth of 0.6% and revenue growth of 2.3%. In 2024, the projected earnings growth is 11.5% with revenue growth of 5.5%.


What's happening this week…

The stock market will be closed on Monday, January 1 in observance of News Year’s Day.


We hope everyone had a great holiday season and wish you all a Happy New Year!


- 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.

 Economic forecasts set forth 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.