The Market Prepares for a New Year After 2023’s Strong Rally
After an unexpectedly strong 2023 that saw the S&P 500 rally 24%, stock futures were flat in overnight trading on Monday as the market geared up for the start of the new year. Investors and analysts are eager to see if the momentum from last year’s rally can be sustained in 2024. The stock market closed on Monday for New Year’s Day, so trading will resume on Tuesday.
Stock Futures Show Little Movement Ahead of First Trading Day of 2024
Futures on the Dow Jones Industrial Average were up a mere 18 points, while S&P 500 futures and Nasdaq 100 futures traded near the flatline. This lack of movement indicates a cautious start to the year, with investors potentially waiting for more clarity on economic and geopolitical factors that could impact the market. It will be interesting to see how the market reacts in the coming days and weeks.
2023 Ends with S&P 500’s Best Win Streak Since 2004
The stock market ended 2023 on a high note, as the S&P 500 recorded its best win streak since 2004, climbing for nine consecutive weeks. This impressive performance was driven by a resilient economy, cooling inflation, and the Federal Reserve’s indication that it would end rate hikes. Despite regional banking crises and conflicts in Ukraine and the Middle East, risk assets enjoyed a significant relief rally throughout the year.
Technology Stocks Lead the Way in 2023’s Record-Breaking Year
Technology shares, particularly mega-cap stocks, played a crucial role in the stock market’s record-breaking year. Companies like Apple, Microsoft, and Nvidia posted impressive gains, with Apple soaring 48%, Microsoft surging nearly 57%, and Nvidia skyrocketing an astonishing 239%. The tech-heavy Nasdaq Composite also had its best year since 2020, ending the year up 43.4%. These strong performances in the tech sector drove much of the market’s overall gains in 2023.
Wall Street Strategists Predict Lower Returns for 2024
Despite an exceptional year in 2023, Wall Street strategists are tempering their expectations for the year ahead. The CNBC PRO exclusive Market Strategist Survey reveals that the top 14 strategists from major firms anticipate lower returns for stocks in 2024. They predict that the S&P 500 will end the year at 4,881, representing a modest 2.3% increase from the previous year’s close. Concerns about a weaker economy and slower earnings growth are contributing to these more conservative forecasts.
Some analysts caution that a cooler growth environment and waning price power could lead to a larger-than-expected decline in earnings per share, posing a significant risk to equities. While factors like monetary policy decisions from central banks are important, the potential impact on earnings growth takes center stage in assessing the market’s trajectory in 2024. Only time will tell if the market can continue its upward trend or if it will face more challenges in the year ahead.
Analyst comment
Positive news: The Market Prepares for a New Year After 2023’s Strong Rally
As an analyst, the market is expected to continue its positive momentum from last year’s rally, but the cautious start indicates some uncertainty as investors wait for more clarity on economic and geopolitical factors.
Neutral news: Stock Futures Show Little Movement Ahead of First Trading Day of 2024
The lack of movement in stock futures suggests a cautious start to the year, with investors potentially waiting for more information before making significant moves. The market’s reaction in the coming days and weeks will be closely watched.
Positive news: 2023 Ends with S&P 500’s Best Win Streak Since 2004
The strong performance of the S&P 500 in 2023, driven by a resilient economy and supportive Federal Reserve policies, bodes well for the market moving forward. Despite some regional crises, risk assets enjoyed a relief rally throughout the year.
Positive news: Technology Stocks Lead the Way in 2023’s Record-Breaking Year
The impressive gains in technology stocks, particularly mega-cap companies like Apple, Microsoft, and Nvidia, drove the stock market’s record-breaking year. This strong performance in the tech sector is expected to continue supporting overall market gains.
Negative news: Wall Street Strategists Predict Lower Returns for 2024
Wall Street strategists’ lower return predictions for 2024 indicate a more conservative outlook for the market. Concerns about a weaker economy and slower earnings growth contribute to these forecasts, and there are risks of a larger-than-expected decline in earnings per share.
Neutral news: Factors like monetary policy decisions and earnings growth will impact the market’s trajectory in 2024. It remains to be seen if the upward trend can be sustained or if the market will face more challenges in the year ahead.
