The Markets (as of market close January 19, 2024)
Wall Street closed the holiday-shortened week generally higher, with each of the benchmark indexes listed here posting gains, except for the Russell 2000 and the Global Dow. The surge in stocks was driven primarily by information technology and communication services, with chip makers leading the charge. Other than financials, which ticked up marginally higher, the remaining market sectors ended the week in the red. Following December’s surge, investors became pensive about stocks to begin the new year after expectations of an impending interest rate cut waned. However, favorable economic news helped bolster confidence in equities, at least for the time being. Long-term bond prices faded, pushing yields higher, as good economic news, particularly in the labor sector, supported the Federal Reserve’s inclination to keep rates higher for longer.
Eye on the Week Ahead
Reports focusing on several different sectors of the economy are available this week. The manufacturing sector is represented by the report on durable goods orders for December. New orders for durable goods rose 5.4% in November. The latest information on sales of new single-family homes is out this week. Sales fell 12.2% in November and look to rebound in December. The advance estimate of gross domestic product for the fourth quarter of 2023 is out this week. GDP expanded at an annualized rate of 4.9% in the third quarter. The report on personal income and expenditures for December is released this week. This report includes the personal consumption expenditures price index, a key inflation guide for the Federal Reserve. The PCE price index slid 0.1% in November. However, other inflation indicators increased in December, and it is likely that the PCE price index will follow suit.
Data sources: Economic: Based on data from U.S. Bureau of Labor Statistics (unemployment, inflation); U.S. Department of Commerce (GDP, corporate profits, retail sales, housing); S&P/Case-Shiller 20-City Composite Index (home prices); Institute for Supply Management (manufacturing/services). Performance: Based on data reported in WSJ Market Data Center (indexes); U.S. Treasury (Treasury yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI, Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates).
News items are based on reports from multiple commonly available international news sources (i.e., wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Forecasts are based on current conditions, subject to change, and may not come to pass. U.S. Treasury securities are guaranteed by the federal government as to the timely payment of principal and interest. The principal value of Treasury securities and other bonds fluctuates with market conditions. Bonds are subject to inflation, interest-rate, and credit risks. As interest rates rise, bond prices typically fall. A bond sold or redeemed prior to maturity may be subject to loss. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.
The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 largest, publicly traded companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. The U.S. Dollar Index is a geometrically weighted index of the value of the U.S. dollar relative to six foreign currencies. Market indexes listed are unmanaged and are not available for direct investment.