Weekly Wrap: Market Swings, Jobs Surprise, and 2024 Uncertainties

Friday's Rebound:  $S&P 500(.SPX)$  ended a four-day losing streak, and the  $NASDAQ(.IXIC)$ halted its five-day slide on Friday.

Week's Outcome: Despite the day's gains, the week concluded with the S&P 500, Nasdaq, and  $DJIA(.DJI)$  giving back between 0.6% (for the Dow) and 3.2% (for the Nasdaq).

- Portfolio Reassessment: Investors reassessed portfolios and gains from 2023, leading to losses for tech stocks (e.g.,  $Apple(AAPL)$  down 5.9%) and gains for defensive names like  $Verizon(VZ)$  (up 6.6%).

Key Events and Outlook

Inflation Data: Thursday's release of the December Consumer Price Index (CPI) is anticipated, with economists expecting a 3.2% year-over-year increase. This data will provide further insights into inflation trends and their potential impact on monetary policy.

Jobs Report : The relatively strong jobs report on Friday, with 216,000 jobs added in December and wage gains exceeding expectations, had mixed effects on the market. While stocks initially fell in pre-market trading, they rallied later in the day, demonstrating the market's cautious response.

NFP

Market Analysis:

Market Volatility: Volatility has resurfaced, reflecting caution and uncertainty about the timing of rate cuts. Profit-taking has been observed in the main financial markets since January 1st.

VIX Exp

Impact on Fed's Decision: The positive employment report has shifted expectations about the timing of rate cuts. A breach of 4.07% for the US 10-year Treasury yield would signal the end of the easing initiated in October and open the door to a potential rebound. Expectations of a Fed rate cut in March have decreased from 90% to 60% in a few days, impacting indices negatively and pushing bond yields higher. The battle against inflation is ongoing, and the labor market's resilience is influencing rate cut forecasts.

Fed rate

Global Economic Landscape: In Europe, December's inflation figures were slightly weaker than expected. In China, indicators for 2024 mirror those of the previous year, with mixed data reflecting both encouragement and persistent mediocrity.

Earnings Season Begins: The upcoming week marks the beginning of earnings season, starting with major U.S. banks sharing their quarterly results $JPMorgan Chase(JPM)$ . The market will closely watch corporate performances for insights into economic conditions and the impact on specific sectors.

·         The first week of 2024 brought market turbulence, marking the end of a prolonged winning streak. The impact of earnings releases, inflation data, and evolving global economic conditions will shape market sentiment in the coming weeks. Investors are closely monitoring developments, recognizing the nuanced dynamics that influence market movements.

*Disclaimer: Market conditions are subject to change based on evolving economic factors and unforeseen events.*

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@TigerStars @CaptainTiger @Tiger_SG @TigerPM