WEEKLY MARKET RECAP – JANUARY 26, 2024
The S&P 500 and the Dow marginally surpassed the previous week’s highs, marking their 12th rise in 13 weeks. The NASDAQ also experienced a modest weekly gain but remained 3.7% below its historic high achieved on November 19, 2021.
Once again, the U.S. economy exceeded the expectations of most economists in the fourth quarter, with GDP expanding at a 3.3% annual rate. Although this represented a slowdown from the third quarter’s 4.9% pace, it concluded a robust 2023, where GDP expanded at a full-year rate of 3.1%, alleviating concerns about the possibility of a recession.
Approaching the midpoint of earnings season, companies in the S&P 500 were poised to see the lowest quarterly profit margins in over three years. The average net profit margin for the fourth quarter stood at 10.7%, compared to 12.2% in the previous quarter, according to FactSet. If 10.7% remains the final number once all fourth-quarter results are in, it would mark the lowest margin since the second quarter of 2020.
The U.S. Federal Reserve’s preferred gauge for tracking inflation posted a modest 0.2% month-to-month increase in December. While this figure was an improvement from the 0.1% decline in November, it concluded a year where the Personal Consumption Expenditures Price Index rose at an annual rate of 2.9% in 2023, excluding volatile food and energy prices—a significant drop from the 2022 level.
U.S. crude oil saw a nearly 7% increase for the week as the price reached over $78 per barrel, the highest level in approximately two months. This gain occurred amid a recent decline in U.S. crude supplies and ongoing tensions in the Middle East.
A Monday gain for a Japanese stock benchmark brought it closer to its record high set in December 1989, before Japan’s economy entered a prolonged slump. Meanwhile, a monthly inflation reading on Friday indicated a more substantial-than-expected slowdown in price increases, alleviating pressure on Japan’s central bank to raise interest rates.
After leading the value equity style by a significant margin in 2023, growth stocks maintained their edge in the opening weeks of this year. At Friday’s close, a U.S. large-cap growth benchmark was up approximately 4.0% year-to-date, while a value benchmark was up just 0.4%.
In addition to more quarterly earnings reports, the upcoming week will feature a U.S. Federal Reserve policy meeting concluding on Wednesday and a monthly jobs report on Friday. The Fed is widely anticipated to keep interest rates unchanged, and the jobs report will provide insights into how January’s job growth compares to December’s larger-than-expected gain of 216,000 jobs.
Major U.S. Economic Reports
| Report | Period | Actual | Previous |
| U.S. leading economic indicators | Dec. | -0.1% | -0.5% |
| S&P flash U.S. services PMI | Jan. | 52.9 | 51.4 |
| S&P flash U.S. manufacturing PMI | Jan. | 50.3 | 47.9 |
| Q4 GDP (prelim) | 3.3% | 4.9% | |
| Initial jobless claims | Jan. 20 | 214,000 | 189,000 |
| Durable-goods orders | Dec. | 0.0% | 5.5% |
| Durable-goods minus transportation | Dec. | 0.6% | 0.5% |
| Advanced U.S. trade balance in goods | Dec. | -$88.5B | -$89.3B |
| Advanced retail inventories | Dec. | 0.8% | -0.1% |
| Advanced wholesale inventories | Dec. | 0.4% | -0.2% |
| New home sales | Dec. | 664,000 | 615,000 |
| Personal income | Dec. | 0.3% | 0.4% |
| Personal spending | Dec. | 0.7% | 0.4% |
| PCE index | Dec. | 0.2% | -0.1% |
| Core PCE index | Dec. | 0.2% | 0.1% |
| PCE (year-over-year) | 2.6% | 2.6% | |
| Core PCE (year-over-year) | 2.9% | 3.2% | |
| Pending home sales | Dec. | 8.3% | -0.3% |
Closing Prices for the Week
| Contract | Close |
|---|---|
| Dow Jones Industrials Average | 38,109.43 |
| Nasdaq Composite | 15,455.36 |
| S&P 500 Index | 4,890.97 |
| CBOE Volatility Index | 13.26 |
| S&P GSCI | 561.45 |
| U.S. Dollar Index | 103.433 |
| 10-Year T-Note (Mar ’24) | 111-010 |
| Crude Oil WTI (Mar ’24) | 78.01 |
| Natural Gas (Mar ’24) | 2.175 |
| Gold (Apr ’24) | 2,036.1 |
| Silver (Mar ’24) | 22.872 |
| Corn (Mar ’24) | 446-2 |
| Wheat (Mar ’24) | 600-2 |
| Soybean (Mar ’24) | 1209-2 |
| Coffee (Mar ’24) | 193.85 |
| Sugar #11 (Mar ’24) | 23.77 |
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