The first week of 2024 is now official. This ends his nine-week winning streak on Wall Street. The S&P 500 fell about 1.5% during the holiday-shortened trading week. The Nasdaq had its worst performance this week, falling more than 3% as shares of Magnificent Seven and other 2023 tech stocks sold off. The Dow Jones Industrial Average fared well this week, falling only 0.6% as non-tech stocks gained attention. A sharp market decline on Tuesday and Wednesday also hampered Santa Claus's rally, with the stock down 1.3% in the last five business days of December and the first two business days of January. Since 1969, historical declines during the best seven-day period have occurred only 13 times. When Santa doesn't appear on Wall Street, stock prices tend to decline in the second half of the year. Although we don't make trading decisions based on seasonal indicators, we do enjoy pointing them out. Looking back at this week's trading, the decline was fairly orderly, with many of the 2023 winners exiting as the move spread to healthcare, utilities, energy, and financials. These were the only sectors that rose this week. The pressure on last year's winner wasn't all that surprising. We also did some trimming for the start of the new year. The stock market was closed on Monday for New Year's Day, but the week saw the release of several important economic indicators, including the government's monthly employment report released on Friday. Nonfarm payrolls increased by 216,000 in December, more than expected. However, that momentum was dampened somewhat by downward revisions in October and November, with payrolls now down by a combined 71,000 from the previous report and larger than the December jobs report. Also, defying the market for signs of further disinflation, average hourly wages rose 4.1% year-on-year in December, beating the expected annual rate of increase of 3.9% and accelerating slightly from November's 4% rise. did. Outside the labor market, there were conflicting views regarding manufacturing. The Supply Management Association released its December manufacturing report on Wednesday. The figure was 47.4%, indicating that the decline continues. It was slightly higher than economists expected, but down from 46.7% in November, indicating the pace of contraction is accelerating. Meanwhile, factory orders announced on Friday showed a recovery, falling 2.6% in November compared to a 3.4% decline in October, which was better than expected. As we look to next week, it's all about inflation and the official kickoff of Q4 earnings season. Economy: The two main economic announcements for next week are the Consumer Price Index (CPI) on Thursday and the Producer Price Index (PPI) on Friday. CPI, a broad measure of retail inflation, is more significant because it represents the price consumers pay. This is a top priority for the Federal Reserve, which aims to fulfill its dual mandate of promoting price stability and maximizing employment. But PPI is still important. This is because PPI provides insight into input costs that businesses can choose to pass on to consumers to protect profits. This then creates a vicious cycle that leads to higher CPI readings in the future. Economists had expected headline CPI to rise 3.2% annually and core interest rates, excluding the more volatile food and energy sectors, to rise 3.8%. PPI is expected to rise 1.3% in headline and 2% in core year over year. Wall Street is hoping for more progress in the Fed's fight against inflation to keep central bankers' sentiments buoyant. The Fed is expected to cut interest rates three times through 2024 at its December meeting. Earnings: Wells Fargo, as the club is known, is scheduled to report fourth-quarter results before the opening bell on Friday. We look forward to a strong third quarter following the last three months of last year. These numbers will be final in 2023, but we will be looking at initial projections for net interest income and net expenses in 2024. We expect to see a lot of focus on the spending guide as management still has work to do to reduce annual operating costs. . At a higher level, we wanted to hear management's thoughts on banks' exposure to the struggling office real estate sector and what they are doing to de-risk that part of their balance sheets. I am. We also received further details regarding the increase in capital requirements, with reassurance that the bank is well positioned to retain more capital as needed, while continuing to return cash to shareholders through dividends and share buybacks. are also welcome. We still think it's a matter of when regulators will lift asset caps imposed on Wells Fargo following past misconduct. Investors, like us, will be listening closely to developments on this front. Monday, January 8th Before the Bell: Helen of Troy (HELE) After the Bell: Accolade (ACCD), Jefferies Financial (JEF) Tuesday, January 9th Before the Bell: Albertsons (ACI) After the Bell: PriceSmart ( PSMT), WD-40 (WDFC) Wednesday, January 10 After the Bell: KB Home (KBH) Thursday, January 11 8:30 a.m. ET: Consumer Price Index 8:30 a.m. ET: First Unemployment Insurance Number of applications Before the bell: Infosys ( INFY) Friday, January 12, 8:30 a.m. ET: Producer Price Index Before the bell: Wells Fargo (WFC), JP Morgan (JPM), Bank of America ( BAC), Bank of New York Mellon (BK), BlackRock (BLK)), UnitedHealth (UNH), Delta Air Lines (DAL) (see here for a complete list of Jim Cramer Charitable Trust stocks) Please.`) Receive advance trade alerts as a subscriber to Jim Cramer's CNBC Investment Club. Jim makes a deal. After Jim sends a trade alert, he waits 45 minutes before buying or selling stocks in a charitable trust's portfolio. 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Traders work on the floor of the New York Stock Exchange (NYSE) on their first day back from Christmas break in New York City, December 26, 2023.
Spencer Pratt | Getty Images News | Getty Images
The first week of 2024 is now official. This ends his nine-week winning streak on Wall Street.
