To The Moon

Yesterday's Session

Markets experienced another challenging day with consecutive losses for the S&P 500 and the Nasdaq Composite. Even the typically resilient Dow Jones Industrial Average failed to generate gains. The decline was marked by a 1.2% loss for the Nasdaq, while the S&P 500 and Dow recorded declines of around 0.8%. This correction comes after a period of nine consecutive weeks of gains in the markets, catching investors by surprise.

$DJIA(.DJI)$ : -0.76% to 37,430.26 - $S&P 500(.SPX)$ : -0.80% to 4,704.81 - $NASDAQ(.IXIC)$ : -1.18% to 14,592.21

Key Events

Several factors contributed to uncertainty in the markets. On one hand, discouraging job openings data and comments from Tom Barkin, the Richmond Federal Reserve President, not ruling out further rate hikes, weighed on investor confidence. On the other hand, the minutes from the December meeting of the Federal Open Market Committee suggested a slightly more hawkish tone than initially perceived, amplifying the ongoing correction.

Market Scenario

• The market seems to be facing a prolonged period of turbulence.

Investors were hoping for confirmation of imminent rate cuts, but the FOMC meeting minutes indicated a more cautious approach. While members expressed an expectation of three 0.25-point cuts by the end of 2024, the high level of uncertainty prevented a complete ruling out of further rate hikes. This nuance in the Federal Reserve's stance contributed to the continuation of selling in the market.

Sectoral performance shows that large caps outperformed small caps, with sectors such as energy and utilities positively distinguishing themselves, while real estate and consumer discretionary lagged behind. Individual stocks such as $Walgreens Boots Alliance(WBA)$ and Boeing weighed on the Dow, while $Chevron(CVX)$ and Merck emerged as top performers.

In the technology sector, the Nasdaq and FAAMG stocks incurred losses, accentuating negative sentiment in technology-heavy indices. $Apple(AAPL)$

Stocks

Volatility, measured by the VIX, increased, indicating a period of heightened turbulence in the markets. Bond yields displayed a mixed reaction, with fluctuations across the 30-year, 10-year, and 2-year maturities.

Yields

• Russell "fear", RVX, is spiking

RVX

• In summary, persistent concerns about int

  erest rates, economic indicators, and uncertainty surrounding the Fed's outlook continue to weigh on the markets, creating a challenging environment for investors reassessing their strategies for the coming year.

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@TigerStars @CaptainTiger @TigerPM @Tiger_SG