It's fair to say there was surprise, nay, disappointment, that the big year-end rally of 2023 ended, well, at the end of 2023.
All major averages fell in the first week of January, with big tech stocks absorbing some of the biggest declines after investors were encouraged by a huge nine-week rally and expected continued gains ahead.
Maybe profits will start again. A mediocre week doesn't make a bad year. The real worry will come if the market has not recovered by the end of the month.
This is because January's performance is often a sign of how markets will behave. It's been accurate 70% of the time since 1929. So a good January can mean a good year for stocks.
In January 2023, the Standard & Poor's 500 index was published. (^EN) – Get a free report up 4.5%. The index closed the year with an increase of 22.4%.
Which brings us to two stocks to watch this week: Apple (AAPL) – Get a free report and boeing (licensed in letters) – Get a free report.
Apple jumped 48% in 2023. The tech giant remains the most valuable company in the world. This week, thanks to two downgrades on concerns about whether revenue growth in its fiscal first quarter and beyond will be modest at best, the stock fell 5.9%.
Related: Top Analysts Give Strong Warning About Apple Stock
Boeing, which is up 36.8% in 2023 thanks to the resumption of travel and new orders, fell 4.5% last week.
And we don't know what will happen to Boeing stock in the next week after the fuselage of a Boeing 737 9 Max exploded after takeoff from Portland, Oregon.
The Federal Aviation Administration ordered 171 737 Max planes operating in the United States to be grounded pending safety inspections. These take four to eight hours to complete, the FAA said Saturday.
Other sources of discomfort
Interest rates rose a little last week. The 10-year Treasury yield ended Friday at 4.046%, the first close above 4% since December 13. It is still far from the 5.022% intraday on October 23.
Crude oil rose 3% to $73.81 a barrel. Fortunately, however, the national average price of gasoline fell slightly to $3.083 a gallon on Saturday. The American Automobile Association reported. The price is down 20.6% since September 18 and has fallen on 116 of the last 121 days.
Continuous reports of corporate stress. Xerox Holdings (XRX) – Get a free report plans to cut its global workforce by 15%. Struggling pharmacy giant Walgreen Boots Alliance (AMB) – Get a free report cut its dividend by 28%. tesla (TSLA) – Get a free report fell 4.4% on the week to $247.49, partly due to news that it is no longer the best-selling electric vehicle maker. Now it looks like China's BYD is the leader. And food processing giant ConAgra Brands (CAG) – Get a free report It said sales in 2024 were likely to fall by 1% to 2%. He had been projecting a 1% gain. The shares, little changed over the week at $28.21 on Friday, are down 27% in 2023.
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A report on decent employment
Friday jobs report offered some good news. The first estimate suggested payrolls rose by about 216,000 in December, up from 173,000 in November and better than expected.
The unemployment rate remained at 3.7%.
The numbers probably won't be as strong, but they will still be good in the next two reviews.
Will the SEC approve a crypto ETF?
This week's big event will likely come on Wednesday, when the Securities and Exchange Commission is supposed to decide whether to approve the idea of exchange-traded funds that invest in cryptocurrencies.
A dozen or more asset managers want approval, including BlackRock (BLACK) – Get a free report and Fidelity Investments, to market ETFs.
First crypto ETF likely to be based on bitcoin (~BTCUSD) – Get a free report, the most widespread cryptocurrency. bitcoin rose 3.5% this week to $44,000. It closed at $45,055 on January 2, the first close above $45,000 since April 5, 2022.
But any investor in a cryptocurrency ETF should remember: it's a volatile bunch. bitcoin rose 156.8% in 2023 after falling almost 75% in 2022.
Also ahead this week:
Economic reports. The big reports are the consumer price index report and the weekly jobless claims report, both scheduled for Thursday.
On Friday you have the Producer Price Index Report.
Price indices can help the Federal Reserve decide when to start cutting interest rates. Futures trading suggests traders are forecasting six rate cuts this year, starting with a cut in March from the current 5.25% to 5.5%. Many Fed watchers are skeptical. Other interest rates have been falling since October.
The fourth season of results accelerates. Conagra and others have already reported and others have warned of weak results. After three relatively quiet days, reports are starting to come fast and furious with Taiwan Semiconductor (SST) – Get a free reportInfosys (INFY) – Get a free report and the regional bank WaFd (W.A.F.D.) – Get a free report.
Enter the financial giants. Friday is your day to shine. They include health insurance giant UnitedHealth Group. (UNH) – Get a free reportJPMorgan Chase (JPM) – Get a free reportBlackRock, Citigroup (c) – Get a free reportBank of America (BACXL) – Get a free reportWells Fargo (CFM) – Get a free report and the Bank of New York Mellon (bk) – Get a free report.
Delta Airlines (give it) – Get a free reportthe second-largest U.S. airline, also reports Friday.
