S&P 500 (SPY) Report – 12/29/23

Good morning, traders!

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

It’s the final trading day of 2023, and Wall Street is experiencing a stable stock market with little change in stock futures. The S&P 500, Dow Jones Industrial Average, and Nasdaq-100 futures have shown slight fluctuations but remain mostly steady. This stability hints at a strong finish for the year, with the S&P 500 close to setting a new record high, potentially marking a successful end to the year.

Throughout 2023, major stock indexes have seen remarkable gains. The S&P 500 is up by 24.6%, the Dow has risen by 13.8%, and the Nasdaq Composite leads with a 44.2% increase, its largest annual gain since 2003. All these indexes are also on track to achieve their ninth consecutive winning weeks, a record not seen since the early 2000s. This growth trend, especially in tech-heavy stocks like Nvidia and Microsoft, has been driven by the excitement around artificial intelligence and other tech advancements.

The market’s strong performance can be partly attributed to the Federal Reserve’s indication of halting rate hikes and possibly reducing rates in the upcoming year. This shift led to a decrease in the 10-year Treasury yield, boosting investor confidence and the likelihood of a “soft landing” for the U.S. economy, avoiding a recession. The broadening market rally in the fourth quarter, with record highs in industrial stocks and significant gains in small-cap stocks, underscores this optimism.

As 2023’s last trading day approaches, there is keen interest in whether the S&P 500 will hit a new record. The index needs only a small increase to surpass its previous peak. The Dow Jones Industrial Average has already achieved a new record. Meanwhile, bond yields have dropped significantly, suggesting a potential for reduced borrowing costs in the near future. With bond markets closing earlier on the final day and economic data like the Chicago Business Barometer due, investors are watching closely for any impacts on the market’s closing performance.

Friday Economic Events:
Chicago PMI 9:45am ET
Baker Hughes Rig Count 1:00pm ET
Farm Prices 3:00pm ET

Fed Speaker Scheduled:
No Fed Speakers Scheduled

Stock Market Holidays:
New Year’s Day – January 1, 2024 – Closed

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