S&P 500 (SPY) Report – 01/02/24

Good morning, and Happy New Year  traders!

The S&P 500 ($SPY) is trading below last Friday’s close. Let’s get into it… 

The US stock market, which experienced a robust performance in 2023, began the new year with a downturn. The S&P 500, after rallying 24% in 2023, saw its futures drop by 0.8% on the first trading day of 2024. This decline was influenced by a slight rebound in interest rates and investors choosing to secure profits from the previous year’s gains. Technology stocks, particularly major companies like Apple, Microsoft, and Nvidia, which had led the 2023 advance, faced early declines in the new year.

A significant contributor to the downturn was Apple’s stock decline, driven by Barclays downgrading it to an underweight rating. This downgrade was based on predictions of weak iPhone sales, leading to a nearly 2% fall in Apple’s share value in premarket trading. This trend also affected other technology giants like Microsoft and Nvidia, indicating a broader shift in the market dynamics as the new trading year commenced.

The market’s shift was also affected by changes in interest rates. The 10-year Treasury yield, which had risen above 5% in October, settled lower by the year’s end but began to rise again in early 2024. Additionally, Wall Street strategists predict lower returns for stocks in the new year, projecting only a modest increase in the S&P 500 by the end of 2024. This cautious outlook is partly due to concerns about a slowing economy and reduced consumer spending, potentially leading to slower earnings growth for companies.

Other market developments included a rise in oil prices due to geopolitical tensions and an increase in bitcoin prices, with expectations of regulatory advancements in the cryptocurrency space. The stock market’s performance in the coming weeks may also be influenced by economic updates, such as the December jobs report, which could affect the Federal Reserve’s policy decisions. These diverse factors together paint a complex picture for the US stock market as it navigates the early stages of 2024.

Tuesday Economic Events:
S&P Global Mfg PMI 9:45am ET – High Volatility Expected
Construction Spending 10:00am ET

Fed Speaker Scheduled:
No Fed Speakers Scheduled

 

DailyBubble’s Disclaimer
This article provided by the DailyBubble team should only be considered as informational and/or entertainment by the reader. DailyBubble makes no representation to buy or sell any security or financial instrument within the article. Readers seeking investment advice should seek independent financial advice from a professional, and independently research and verify. The DailyBubble team wrote this article and may express its own opinions therein.

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