Market Recap (12/31/23)
Market Recap of the Week of December 26, 2023 - December 29, 2023
Source: Apple Stocks Application
Overall Market Trends:
This past week was a shortened one due to Christmas on Monday. Over the course of last week, the market was more or less steady - increasing slightly at the start of the week, and dipping slightly towards the end of the week, ultimately ending up near its starting price. The New York Stock Exchange rose 45 points (0.27%), the S&P 500 increased 5 points (0.10%), and the Dow Jones Industrial Average finished the week up 249 points (0.66%). This marked the eighth straight week of gains for some major indexes including all-time highs. This week was dictated majorly by new data, inflation, and treasury bonds.
In recent weeks, the market has been greatly influenced by the fact that investors believe that the Fed will soon cut interest rates as inflation eases. A personal-consumption expenditures index data release on Friday, December 22 set the tone for the market for the beginning of this week. The report indicated that inflation was in fact on the decline, for the first time since 2020, further supporting investors’ beliefs.
The Treasury Department had strong auctions for the 2-year treasury bond on Tuesday and the 5-year treasury bond (sold $58 billion worth of 5-year treasury bonds) on Wednesday, December 27. The strong auctions increased morale and indicated that investors are not worried about current treasury yields. However, the market prices began to tip, reaching their lowest levels on the day, Thursday afternoon when the results of the 7-year treasury bond auction were released, suggesting weaker-than-expected demand. The dip bled into Friday’s trading session with major indexes finishing the day (and year) off negative.
Source: TradingEconomies.com
Past Earnings Report:
With the year coming to a close, no companies released earnings reports this week.
Looking Towards the Future
What to expect:
The market is expecting there to be no change in interest rates at the January 30-31 Fed policy meeting. However, investors believe that they will finally cut interest rates by 25 basis points (0.25%) at the March Fed policy meeting.
Some market analysts believe that the market got ahead of itself and priced in too many rate cuts next year. This could potentially lead to a decrease in prices, should expectations shift.
Future Earnings Reports:
