AS OF JANUARY 15TH, 2024, GLOBAL STOCK MARKETS EXHIBITED CAUTIOUS OPTIMISM FOR THE YEAR. MAJOR INDICES POSTED MODEST GAINS YEAR-TO-DATE
US Markets: The Dow Jones Industrial Average rose 1.3%, the S&P 500 advanced 1.7%, and the Nasdaq Composite added 1.0%.
Global Performance: European markets mirrored the US, with moderate gains. Asian markets showed some regional disparity.
SECTOR STANDOUTS
Growth Outperforms Value: Growth-oriented stocks continued their outperformance from the previous year. Communication Services (+4.4%) and Financials (+3.1%) led the pack, as the MAG 7 continue to lead.
Energy Lags:** The Energy sector remained the laggard, down nearly 3% YTD. This decline is likely due to a combination of factors, including softening crude oil prices.
MARKET MOVERS
Geopolitical Tensions: North Korea launched what appeared to be an intermediate-range missile, raising concerns about regional stability. However, the market essentially took it in its stride
Central Bank Stance: No significant announcements regarding interest rates or policy changes were made by major central banks this early in the calendar
OTHER ASSET CLASSES
Bond Markets: Bond prices showed slight weakness, with the yield on the 10-year U.S. Treasury note edging closer to 4%. This trend reflects some investor anticipation of potential future rate hikes.
Currency Markets:** The U.S. Dollar remained relatively stable against major currencies.
Commodities: Overall commodity prices were flat. Crude oil remained pressured by concerns of slowing global economic growth.
Precious Metals: Gold prices held steady, hovering around $1,820 per ounce. Silver prices experienced slight volatility, but closed the day near $22 per ounce.
OVERALL
Investor sentiment remained cautiously optimistic as the market awaited further cues on inflation, interest rate policy, and global economic growth. The upcoming earnings season and any major geopolitical developments will likely influence market direction in the coming weeks.
Defensive sectors continue to become cheaper and cheaper against the more ‘risk on’ sectors such as technology shares. Utilities, consumer staples trade at historically depressed valuation levels. That’s not to say that they won’t become cheaper still, but it is worth putting on one’s radar.
