Weekly Market Bullets

for the week ending 1/26/2024

• US Equity Markets touched record highs again last week, helped by positive economic data and cooling inflation. The S&P 500 rose 1.1% for the week and is now up 2.6% for the year. The Nasdaq was up 0.9% for the week to bring its gains for the year to 3.0%, while the Russell 2000 (small cap stocks) rallied 1.8% for the week but remains down 2.4% for the year.

• Global Equity Markets rose as China lowered reserve requirements to stimulate its economy and investors increasingly hope for rate cuts in Europe later this year. Developed Markets increased 1.9% for the week and are now down 0.7% for the year. Emerging Markets were up 1.5% on a rebound in Chinese equities but remain down 3.8% for the year.

• US Economic Growth was faster than expected in Q4 while inflation eased. The initial estimate for US economic growth for Q4 came in at 3.3%, much better than the 2.0% expected. At the same time, the Personal Consumption Expenditures (PCE) Price Index for December was up 2.6% from a year ago, in line with expectations. The Core PCE Price Index, which excludes food and energy prices and is the favorite inflation measure of the Federal Reserve, showed a year-over-year gain of 2.9% in December, down from 3.2% in November and the lowest level since March 2021.

• While still early, earnings growth for Q4 thus far has generally been worse than expected. With roughly 25% of the S&P 500 firms reporting their Q4 results thus far, the blended year-over-year earnings decline has been -1.4%. Coming into earnings season, Street expectations called for earnings growth in Q4 of 1.5%. Of those companies reporting, 69% have beaten earnings per share forecasts, well below the historical average of 74%. 68% of firms have topped revenue estimates, which is above the historical average of 64%.

Market Data

for the week ending 1/26/2024