U.S. stocks are set to begin the new year with caution amid uncertainties surrounding upcoming economic reports and Federal Reserve speeches. Investors seek confirmation on anticipated rate cuts, with a focus on the Federal Reserve’s December meeting minutes and jobs data for guidance. Geopolitical tensions drive crude oil higher, while cryptocurrencies see upward movement.
Cues From Last Week’s Trading:
U.S. stocks closed 2023 on a positive note, completing a nine-week winning streak—the best since 2004.
The year saw significant gains, especially in mega-cap tech stocks, with the Nasdaq achieving its best annual performance since 2020 with a 43% surge. Investors reacted to eased inflation, creating expectations for potential Federal Reserve rate cuts.
US Index Performance In Week Ended Dec. 29, 2023
| Index | Week’s Performance | December Performance | CY2023 Performance | Value |
| Nasdaq Composite | +0.12% | +5.52% | +43.42% | 15,011.35 |
| S&P 500 Index | +0.32% | +4.42% | +24.23% | 4,769.83 |
| Dow Industrials | +0.82% | +4.84% | +13.70% | 37,689.54 |
| Russell 2000 | (-0.34%)- | +12.05% | +15.09% | 2,027.07 |
Analyst Color:
In light of the Nasdaq’s robust performance in 2023, Wedbush analyst Daniel Ives anticipates the emergence of ‘the Year of AI,’ foreseeing a potential 25% surge in tech stocks for 2024.
”We believe tech stocks will be up 25% in 2024 with a NASDAQ 20k level in our bull case scenario as the Street is still significantly underestimating how quickly this AI monetization cycle is playing out among enterprises in the field,” he added.
Meanwhile, FundStrat’s Tom Lee, renowned for his accurate 2023 S&P prediction, interprets Bitcoin‘s BTC/USD rally above the $45,000 mark as a favorable sign for high-risk asset classes at the outset of the new year.
Chart Courtesy of Benzinga Pro
Futures Today
Futures Performance On Tuesday
| Futures | Performance (+/-) |
| Nasdaq 100 | -0.90% |
| S&P 500 | -0.58% |
| Dow | -0.44% |
| R2K | -0.56% |
In premarket trading on Tuesday, the SPDR S&P 500 ETF Trust SPY fell 0.53% to $472.79 and the Invesco QQQ ETF QQQ slumped 0.89% to $405.86, according to Benzinga Pro data.
Upcoming Economic Data:
As the new year kickstarts, investors are likely to focus on the week’s key economic data on the labor market and a few Fed speeches scheduled for the week. The all-important non-farm payroll data for December, ADP’s private payroll data, the results of the Job Openings and Labor Turnover Survey for November, and the routinely scheduled weekly jobless claims could create ripples.
Traders may also rest their focus on S&P Global and the Institute of Supply Management’s private sector activity data and the minutes of the Federal Reserve’s December rate-setting meeting.
On Monday, S&P Global is scheduled to release its final manufacturing sector purchasing managers’ index at 9:45 a.m. EST. Economists, on average, expect the PMI to come in at 48.2 in December, suggesting a contraction in activity.
The Commerce Department is due to release its construction spending report for November at 10 a.m. EST. The consensus estimate calls for a 0.5% month-over-month increase in construction output, with the growth almost flat with the October reading of 0.6%.
The Treasury will auction three- and six-month notes at 11:30 a.m. EST.
See Also: How To Trade Futures
Stocks In Focus:
- Tesla, Inc. TSLA shares are in focus as the electric-vehicle giant is scheduled to report its fourth-quarter deliveries update Tuesday ahead of the market open.
- Chinese EV startups Nio, Inc. NIO, XPeng, Inc. XPEV, and Li Auto, Inc. LI fell in premarket trading despite reporting fairly strong deliveries for December and the fourth quarter. BYD Co Ltd. BYDDY, which trades over the counter, could also move as its quarterly total will likely propel it as the top global EV maker.
Commodities, Bonds, Other Global Equity Markets:
Crude oil futures rallied 2.23% to $73.25 in the early European session on Tuesday, reflecting supply concerns after U.S. helicopters on Sunday retaliated against Iran-backed Houthi forces’ attack on a container vessel in the Red Sea.
The benchmark 10-year Treasury note rose 0.099 percentage points to 3.959% on Tuesday.
Most Asian markets that were open for trading closed Tuesday’s session mostly lower, with China and Hong Kong leading the slide, as traders digested weak private sector activity data out of China. The Japanese and New Zealand markets remained closed for public holidays.
European stocks were also mostly lower in the first trading session.
Image made via AI on MidJourney
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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