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Market Recap
WEEK OF JAN. 8 THROUGH JAN. 12, 2024
The S&P 500 index rose 1.8% last week, erasing the previous week's decline and putting the market benchmark into positive territory for the new year to date. The S&P 500 ended Friday's session at 4,783.83, up from last Friday's closing level of 4,697.24. It is now up 0.3% for the month and year to date following a healthy jump in 2023.
This week's climb came as the first round of Q4 corporate earnings reports arrived mixed but somewhat better than anticipated. Also, an unexpected month-over-month drop in December US producer prices helped to ease investors' inflation concerns after December's US consumer prices rose more than expected.
JPMorgan Chase (JPM) kicked off the Q4 earnings season with the report of 2023 being its most profitable year ever. Its Q4 adjusted earnings came in at $3.97 per share, surpassing analysts' mean estimate, while its revenue for the quarter also topped the Street view. Bank of America (BAC) reported adjusted earnings per share above expectations, although revenue missed. Citigroup (C) swung to an unexpected quarterly loss and unveiled plans to cut 20,000 jobs.
On the inflation front, government data showed the US seasonally adjusted consumer price index rose by slightly more than expected in December. However, core CPI, a closely watched inflation measure that excludes food and energy prices, rose by 0.3%, as expected, and was steady with a 0.3% gain in the previous month. Also, producer prices unexpectedly slipped month over month in December while annual wholesale costs grew less than expected.
The technology sector led the gainers this week, up 4.9%, followed by a 3.4% climb in communication services. Other sectors in the green included consumer discretionary and consumer staples as well as health care, real estate and industrials.
On the downside, the energy sector fell 2.4%, followed by a 1.9% drop in utilities and a 1% decline in materials. Financials dropped 0.5%.
The technology sector's gainers included shares of Juniper Networks (JNPR), which jumped 25% as Hewlett Packard Enterprise (HPE) said it agreed to buy the networking gear vendor fort $14 billion.
In communication services, shares of Omnicom Group (OMC) rose 3.4% as analysts at UBS launched coverage of the stock with an investment rating of outperform and a price target of $117 a share.
The energy sector's drop came as crude oil futures slipped. Decliners included Baker Hughes (BKR), down 5.7%.
This week, a number of large companies will release quarterly results, including Morgan Stanley (MS), Goldman Sachs Group (GS), Prologis (PLD), Charles Schwab (SCHW) and Alcoa (AA).
Economic data will include December retail sales, industrial production and capacity utilization on Wednesday, December housing starts and building permits on Thursday and December existing home sales on Friday.
