(Bloomberg) — Gains in some of the world's biggest technology companies fueled a rally in stock prices, with traders also looking to the latest economic data and FedSpeak for clues about the U.S. central bank's next steps. ing.
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After a series of declines, the S&P 500 rose as bond market volatility eased. Nasdaq 100 closes at record high as Apple Inc. rises on analyst upgrade and Taiwan Semiconductor Manufacturing Co.'s outlook lifts semiconductor maker on hopes for global technology recovery in 2024 Ta.
Stock traders remained unfazed by data showing strength in the labor market as Federal Reserve officials consider lower interest rates and look for signs of economic slowdown. Atlanta Fed President Rafael Bostic urged policymakers to proceed with caution, considering the potential impact of unpredictable events, from elections to global conflicts. Patrick Harker of Philadelphia said he expects inflation to continue falling toward target.
“Given the underlying strength of the U.S. economy, it's hard to be too bearish at this point,” said Chris Zaccarelli of the Independent Advisor Alliance. “Widespread pessimism and doubt about the stock market and the economy is a contrarian signal and one of the biggest reasons to go against the crowd. If the last skeptics turn, the market is once again vulnerable to major shocks. It's going to be vulnerable, but we're not there yet.”
The S&P 500 closed at about 4,780 and the Nasdaq 100 rose 1.5%. The semiconductor maker's index rose almost 3.5%. The yield on two-year bonds remained around 4.35%. Crude oil exceeded $74 per barrel. Bitcoin fell below $41,000.
Fawad Razaqzada of Citi Index and Forex.com said the recovery in stock prices suggests the situation is stabilizing, but it doesn't mean things will stay that way. He cited a growing recognition that big central banks may not cut interest rates as much or as quickly as markets expect.
Oanda's Craig Irlam said: “There's clearly a desperation to hang on to the optimism that made such a strong end to the year possible, but unlike in previous years, the data isn't really reflecting that.” . “The releases we've seen so far this month have been great and largely in line with the expectations people had for 2024. But are they enough?”
Meanwhile, Blackstone CEO Steve Schwarzman said he expected the Fed to cut interest rates and expected “animal spirits” to return to the market as more investors bet on lower rates. He said that He told Bloomberg TV on the sidelines of the World Economic Forum that the timing of the Fed's interest rate cuts is unclear and would have a “mysterious impact” on investors.
The S&P 500 is coming off its best winning streak in 20 years and faces a roadblock in 2024, still missing the all-time closing record set two years ago. However, technical indicators that measure the stock's buying and selling momentum show that bulls are still stepping in to push the stock higher.
The index's DVAN trendline (a proprietary divergence analysis that measures buying and selling pressure) has been on a buying spree since the S&P 500 bottomed in late October, with investors buying stocks in multiple trading sessions toward the close. I keep buying them. This past week.
To Dan Wantrowski of Janney Montgomery Scott: The market has stabilized after the recent downturn, but we still expect a “bumpy road.”
“There are a lot of conflicting market internals and technicals on the charts right now, which should lead to a volatile, range-bound glidepath in the near term,” Wantrobski said.
After suffering missteps early last year, fund managers are going all in on tech stocks, prompting warnings that the Nasdaq 100 index is becoming more vulnerable than ever to investor withdrawal. .
Société Générale's weighted analysis of data on Nasdaq 100 index futures and e-mini contracts provided by the Commodity Futures Trading Commission found that the net long amount of Nasdaq 100 futures held by hedge funds is at the highest level in about seven years. became. Meanwhile, a Bank of America survey of global fund managers conducted this month found that the most crowded trades were the “Magnificent Seven” as a way to counter the prospect of Fed easing. It turns out he's long stocks and other tech-related growth stocks.
Miller Tabak + Co.'s Matt Maley said the news coming out of the semiconductor industry is “definitely bullish” and that “if we can spark a significant and sustained move beyond the late 2023 highs, it will be a global “It's going to be a boost to the market.” The stock market will continue to rise. ”
Company highlights:
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Humana's preliminary profit fell short of expectations as members' medical costs were higher than expected, and the Medicare-focused insurer expected an increase in enrollment of anemic patients this year.
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Boeing has secured an order for 150 Max jets from India's newest airline. It's rare good news for the U.S. aircraft manufacturer since part of its fuselage was blown off on an Alaska Airlines flight about two weeks ago.
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Nelson Peltz says the Walt Disney Co. cannot heal its “self-inflicted wounds” under its current management and should aim for “Netflix-like profits” as the entertainment giant waits on its board of directors. He spoke days after rebuffing an activist bid for a seat on the board of directors.
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Bayer AG has rejected appeals from investors unhappy with the company's continued struggle to recover from its costly Monsanto acquisition and plans to break up the conglomerate, people familiar with the matter said. It is said to be leaning.
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Birkenstock Holding's growth targets failed to satisfy traders who were expecting more from the German sandal maker.
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KeyCorp reported fourth-quarter profit that was lower than analysts expected and expected net interest income to decline this year.
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Goodyear Tire & Rubber Co. has appointed Stellantis NV executive Mark Stewart as chief executive officer following a pressure campaign by shareholder activist Elliott Investment Management.
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Discover Financial Services' fourth-quarter profit fell 62% as it continues to grapple with the fallout from compliance and risk management mismanagement that led to the resignation of its chief executive last year.
This week's main events:
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Canadian retail sales Friday
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Japanese CPI, tertiary index, Friday
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U.S. existing home sales, University of Michigan consumer sentiment, Friday
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ECB President Christine Lagarde and IMF Managing Director Kristalina Georgieva will speak in Davos on Friday.
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San Francisco Fed President Mary Daley speaks on Friday
The main movements in the market are:
stock
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As of 4 p.m. New York time, the S&P 500 was up 0.9%.
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Nasdaq 100 rose 1.5%
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The Dow Jones Industrial Average rose 0.5%.
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MSCI World Index rose 0.7%
currency
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Bloomberg Dollar Spot Index little changed
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The euro fell 0.1% to $1.0869.
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Sterling rose 0.2% to $1.2699.
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The Japanese yen remained almost unchanged at 148.19 yen to the dollar.
cryptocurrency
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Bitcoin fell 4.2% to $40,850.5.
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Ether fell 3.1% to $2,446.11.
bond
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The 10-year Treasury yield rose 4 basis points to 4.14%.
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Germany's 10-year bond yield rose 3 basis points to 2.35%.
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UK 10-year bond yields fell 6 basis points to 3.93%.
merchandise
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West Texas Intermediate crude rose 2.1% to $74.07 per barrel.
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Spot gold rose 0.8% to $2,022.08 an ounce.
This article was produced in partnership with Bloomberg Automation.
–With assistance from Jessica Menton, Isabel Lee, Jeran Wittenstein, and Elena Popina.
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