Market Recap (1/28/24)
Market Recap of the Week of January 22, 2024 - January 26, 2024
Source: Apple Stocks Application
Overall Market Trends:
Last week, all major indexes finished positive. The Dow Jones Industrial Average rose 108 points (+0.28%), reaching a new milestone benchmark of 38,000 points. The S&P 500 increased 28 points (+0.57%) continuing to push its all-time high record. The NASDAQ Composite rose 29 points (0.19%) and the New York Stock Exchange posted weekly gains of 176 points (+1.05%). Large-cap company earning reports and new inflation data both played major roles in the market last week.
S&P flash U.S. services PMI rose in January from 51.4 to 52.9 and the flash U.S. manufacturing PMI rose to 50.3 from 48.2 in December (anything above 50 indicates economic growth). However, this data suggests that the Fed may not be cutting rates at the March meeting.
New data surfaced on Thursday, suggesting that the U.S. economy was swaying away from a recession as the GDP in December was greater than expectations.
The Fed’s preferred inflation gauge, the personal consumption expenditure index, rose in December, ultimately keeping inflation below 3%, strengthening the case for rate cuts as soon as possible.
Past Earnings Report:
The past week was majorly influenced by earnings with numerous large-cap companies releasing strong earnings. On Wednesday, Netflix released strong earnings and shares rose an astounding 10.7%. Disappointing sales data from Tesla (TSLA) caused the electric vehicle powerhouse to drop 12.00% on Thursday. The TSLA results had a ripple effect as many other EV companies also saw decent decreases in their stock price. Similar to Netflix, American Airlines shot up 10.3% on Thursday after releasing extremely strong earnings. IBM also rose 9.5% after strong earnings. On Friday, the market was again partially swayed by earnings as Intel Corporation released weak earnings which sent the stock tumbling 11.9%.
Looking Towards the Future
What to Expect:
In the upcoming week, the Fed will hold a policy meeting. Over the past year, interest rates have been one of the most influential things impacting the stock market. However, the market is expecting no change in interest rates as most of the data, and statements from Federal Reserve Officials, point towards that outcome.
Additionally, about 23% of the stocks listed in the S&P 500 will release earnings next week meaning that the indices will be largely swayed by earnings reports in addition to the policy meeting.
Future Earnings Reports: