Markets advanced higher for the week. Will the New Year push continue?
Monday
S&P 500 0.16% | NASDAQ -0.38%
Markets ebbed and flowed on Monday but landed in neutral territory at the close. The 10-year Treasury climbed higher to levels last seen in October 2023.
Tuesday
S&P 500 0.11% | NASDAQ -0.23%
Trading was flat on the day with the softening prices for producers keeping most trading level. Tech stocks continued to push lower ahead of the bigger release to come out on Wednesday, consumer inflation.
Wednesday
S&P 500 1.83% | NASDAQ 2.45%
Markets celebrated the release of a flattening headline consumer price increase for December while Core Inflation (excludes food and energy prices) fell for the month. The move afforded markets a run up in hopes of another rate cut in the 2nd quarter.
Thursday
S&P 500-0.21% | NASDAQ -0.89%
Major indexes retreated from the prior session as retail sales disappointed for the first time in 6 months which could reflect a crack in the consumer’s spending patterns, even during the holiday season to close out 2024.
Friday
S&P 500 1.00% | NASDAQ 1.51%
On the week, there were more positives than negatives leading the major benchmarks to closer higher. Housing starts jumped to their highest level since March 2024.
Conclusion
S&P 500 2.91% | NASDAQ 2.45%
The S&P500 took talks of a chance of a week start to the new year personally, with the index staging a comeback from last week’s selloff. NASDAQ recovered all losses as well. Inflation data was the primary news for the week and hopes for a rate cut in the near team hang in the balance. If prices continue to fall, then a rate cut is more on the table, but all indications are pointing towards a “wait-and-see” approach as new policies are implemented following the transfer of political power on the 20th. It is hard to draw any real correlation between new administrations to market performance as the change of power doesn’t usually send markets reeling either way. It does, however, impact money flows. Overall, markets will do what markets do as they look at how to effectively capture opportunities in a new political environment with the focus being in isolated areas of change more than a broad shift in the direction of the economy. Independent bodies (like the Federal Reserve) are looking at the entire data from the economy to determine how strong (or weak) it is. Right now, the economy is adding jobs and inflation is coming down, which bodes well for growth in the near-term. It is important to keep a watchful eye on those data points to see if there is a push in the opposite direction.
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