Nasdaq stock price falls more than 1%, stocks widening losses heading into the new year

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U.S. stocks fell on Wednesday as optimism for a rapid rate cut waned as new jobs data and the latest Federal Reserve minutes showed the timing of a rate cut remains uncertain.

The Dow Jones Industrial Average (^DJI) fell more than 0.7% (285 points), and the benchmark S&P 500 (^GSPC) fell about 0.8%. A day after a painful session in which tech stocks fell about 1.6%, the Nasdaq Composite Index (^IXIC) fell another nearly 1.2%.

Signs of further cooling in the U.S. labor market greeted investors on Wednesday. There were 8.79 million job openings at the end of November, the lowest level since March 2021, according to new data from the Bureau of Labor Statistics. Economists surveyed by Bloomberg had expected 8.82 million jobs.

Hopes that the year-end market rally would continue into 2024 were dashed as stock indexes and bond prices fell in tandem, marking the worst start to the year in decades. Bond prices fell for a fourth day in a row, with the 10-year Treasury yield (^TNX) rising nearly 4%, before reversing in the afternoon. The 10-year U.S. Treasury yield ended Wednesday at about 3.91%.

read more: Impact of the Fed’s interest rate hike suspension on bank accounts, CDs, loans, and credit cards

Stocks were little changed after the latest Federal Reserve minutes were released Wednesday afternoon. Minutes of the meeting revealed that Fed officials believe the “upside risks” to inflation have diminished.

“Nearly all participants expressed the view that lowering the target range for the federal funds rate by the end of 2024 is appropriate.” The minutes read as follows:

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Thursday, January 4, 2024 2:33am IST

Winner in late 2023 will be delayed to start 2024

Stocks closed lower on Thursday as some of Wall Street’s favorite December sectors lagged in Wednesday’s trading.

Overall, the Dow Jones Industrial Average (^DJI) was down more than 0.7% (285 points), and the benchmark S&P 500 (^GSPC) was down about 0.8%. The Nasdaq Composite Index (^IXIC) fell about 1.2% after a painful session in which tech stocks fell about 1.6%.

The S&P 500 is currently on its worst three-day streak since October.

Many of the market movements were contrary to where stock prices would end in 2023. Real estate fell more than 2% and the Russell 2000 fell more than 3%, its worst day since March 2023.

Both interest rate-sensitive sectors had soared in December as investors priced in a March rate cut by the US Federal Reserve, but have now seen some decline as the market has tempered interest rate cut expectations. It’s back up.
Thursday, January 4, 2024 2:03am IST

The Fed-fueled bull market that ended 2023 on a high note may have left investors with an interesting conundrum.

With so many market participants flocking to risk-on areas of the market such as the Russell 2000, financials and real estate that ended last year, the return of 2023 tech trades in January will be the market’s biggest pain trades starting in 2024. there is a possibility.

Oson Kwon, U.S. equity strategist at Bank of America, told Yahoo Finance: “As an aside, clients and other sell-side firms believe that equal-weighted indexes are more likely to outperform, and that I’ve heard that it’s becoming a consensus,” he told Yahoo Finance.

Therefore, BofA’s Kwon’s team believes that if the recent market shift to expansion does not continue into January, and January’s gains in the cap-weighted S&P 500 and the Magnificent Seven do not continue, it will be painful for the market. I think there is a possibility that it could be useful.

Kwon said he still believes the S&P 500 and cyclical stocks will outperform overall, but clarified: “We’re not necessarily looking for mega-cap stocks to rally in 2024.” .

For now, BofA is simply emphasizing that the consensus in the once technology-driven market has clearly shifted, and that this could be a key focus in future market movements.
Thursday, January 4, 2024 1:28am IST

Oil prices rise more than 3% on concerns about supply disruptions, OPEC promises unity

Oil prices soared on Wednesday after reports of disruption at Libya’s main oil fields and a pledge of unity by oil alliance OPEC.

West Texas Intermediate (CL=F) settled at $72.70 per barrel. Brent crude oil (BZ=F) closed at $78.25 per barrel.

The surge came after protests forced the closure of the 300,000 barrel-per-day El Sharara plant. The disruption has further heightened concerns about supply disruptions caused by attacks in the Red Sea region.

On Wednesday, the Iranian-backed Houthi rebels announced they had targeted a container ship heading to Israel. The move came after US Navy helicopters destroyed three Houthi boats in response to a ship hijacking attempt in the Red Sea on Sunday.

The threat of a broader conflict that threatens Iran’s oil production has driven up prices.

“The real threat to prices is Iranian oil exports (nearly 2 million barrels per day) that could suddenly be removed from world markets,” Dennis Kistler, senior vice president at BOK Financial, said Wednesday.

Also on Wednesday, OPEC said its members “reaffirm their firm commitment to the common goal of unity and cohesion” within the organization.

The latest production cuts announced by the Organization of the Petroleum Exporting Countries and its allies last year sparked skepticism among market participants. Last month, Angola announced it was leaving the cartel over a quota dispute.
Thursday, January 4, 2024 1:05am IST

Fed minutes: Officials see inflation risks ‘reducing’

Fed officials appear increasingly confident that inflation will be better controlled by the end of 2023.

“While participants believe that the upside risks to inflation have declined, inflation remains well above the Committee’s long-term objective and the risk that progress towards price stability will stall remains,” the statement said. “I pointed out that there were.”

Additionally, participants said that while current policy rates are “likely at or near the peak of this tightening cycle,” the actual path will depend on “how the economy develops.”

The stock price remained largely unchanged after its release. The Dow Jones Industrial Average (^DJI) was down 0.3%, and the benchmark S&P 500 (^GSPC) was down about 0.4%. The Nasdaq Composite Index (^IXIC) fell about 0.9% after tech stocks were hurt by about 1.6%.
Thursday, January 4, 2024 12:09am IST

Wednesday Afternoon Trend Ticker

SOFI (SOFI) stock topped Yahoo Finance’s trend ticker page on Wednesday. The stock price fell about 13% as the financial services company was downgraded from market perform to underperform by KBW. KBW analyst Mike Perito thinks the recent jump in the stock, which is up nearly 30% in the past month, may have been overdone.

Xerox (XRX) stock fell more than 8% after the company announced plans to cut 15% of its workforce as part of a review of its operating model.

Eli Lilly (LLY) stock rose about 4% to an eight-week high. UBS named Eli Lilly one of its top drug stocks for 2024 on Wednesday, citing upgrades to the company’s weight-loss drug Munjaro among other factors driving the stock’s rise this year.

AMC (AMC) stock hit an all-time low on Wednesday. Ever since I became a fan of meme stocks, the stock has struggled amid the reopening from coronavirus lockdowns and the Hollywood strike. In 2023, AMC stock fell 83%.
Wednesday, January 3, 2024 10:59 PM IST

Real estate weighs on Wednesday’s trading

The interest rate-sensitive sector had been surging since early November as investors increasingly bet on a soft landing.

However, some skepticism has entered the 2024 theory, with sectors such as real estate (XLRE), which have risen in the recent market rally, showing some gains.

Real estate was the biggest laggard among 11 sectors on Thursday, down nearly 2% by 12:30 p.m. ET. The S&P 500 (^GSPC) fell about 0.7%.

Source: Yahoo Finance

Notably, today’s market move comes as investors’ bets on a rate cut in March have eased. As of Thursday, investors saw a roughly 75% chance of a rate cut in March, according to the CME FedWatch tool. This is down from the 90% probability investors were seeing a week ago.
Wednesday, January 3, 2024, 10:05 PM IST

Economist says there is ‘little hope’ for manufacturing recovery so far

The December ISM manufacturing report released on Wednesday showed the sector has been in contraction for the 14th consecutive month.

However, the index’s reading of 47.4 was higher than last month’s reading of 46.7 and also beat Wall Street’s expectations of 47.1.

But Thomas Simmons, U.S. economist at Jefferies, said he doesn’t think the turnaround has happened yet, with the index only slightly above its lowest level in six months.

“The environment for capital spending remains very challenging due to high interest rates and economic uncertainty,” Simmons said in a note to clients on Wednesday. “Flimsy expectations that a rate cut is on the horizon pose an upside risk to the sector going forward, but recovery is still a long way off.”

But economists said there were some bright spots in the report, including a decline in the price paid component, which showed positive signs in the fight against inflation.

“The data do not show strong signs of any change in the ongoing goods disinflationary trend,” Simmons wrote.
Wednesday, January 3, 2024, 9:22 PM IST

Crude oil prices rise 3% due to supply concerns

Oil futures rose more than 3% on Wednesday amid supply concerns following reports of disruptions at Libya’s main oil fields.

West Texas Intermediate (CL=F) rose to $72.75 per barrel in morning trading. Brent (BZ=F) hit a trading high of $78.29.

Futures prices have been volatile in recent sessions due to concerns about rising tensions in the Red Sea, which connects to the Suez Canal, a major shipping route.

Crude oil oscillated between positive and negative territory on Tuesday after Iran sent warships to the Red Sea.

“The real threat to prices is Iranian oil exports (nearly 2 million barrels per day) that could suddenly be removed from global markets,” Dennis Kistler, senior vice president at BOK Financial, said in a note to clients on Wednesday. said.
Wednesday, January 3, 2024, 8:49pm IST

Job openings reached lowest level since March 2021

Job openings in November were at their lowest level since March 2021, lower than Wall Street expectations and reflecting continued cooling in the labor market through the end of 2023.

New data from the Bureau of Labor Statistics released Wednesday showed there were 8.79 million job openings at the end of November, down slightly from 8.85 million job openings in October. Economists surveyed by Bloomberg had expected 8.82 million job openings.

The report also showed that the turnover rate, a sign of worker confidence, fell to 2.2% from 2.3% the previous month. Additionally, the JOLTS report showed that employment for the month was 5.5 million, down slightly from 5.9 million last month.
Wednesday, January 3, 2024, 8:08 PM IST

Technology is lagging behind in the open world.

Bond yields rose as tech stocks fell on Wednesday, continuing a trend seen a day earlier.

The Dow Jones Industrial Average (^DJI) was down 0.3%, and the benchmark S&P 500 (^GSPC) was down about 0.5%. The Nasdaq Composite Index (^IXIC) fell about 0.7% after a painful session in which tech stocks fell about 1.6%.

Meanwhile, bonds fell for the fourth straight day, with the 10-year Treasury yield (^TNX) rising nearly 4%.

The move comes after Tuesday marked the Nasdaq’s worst start to the year since 1972.
Wednesday, January 3, 2024, 4:58 PM IST

Labor market attracts attention

After a rough first day of trading, investors’ attention on Wednesday will turn to the labor market. A monthly update on job openings and turnover, known as the JOLTS Report, will be released at 10 a.m. ET.

A decline in job openings throughout 2023 would be an early indicator that the U.S. labor market is slowing, and Wednesday’s data will be a key table-setter ahead of Friday’s December jobs report.

Wednesday’s report predicted there would be 8.85 million job openings at the end of November.