Stock Market Today — Jan, 10th 2024

Market Performance

The stock market opened slightly higher today, with the S&P 500 rising 0.2%, the Dow Jones Industrial Average gaining 49 points, or 0.1%, and the Nasdaq Composite advancing 0.3%. However, it’s important to note that market activity is currently fairly muted, as investors await the release of fresh U.S. inflation data and earnings reports from major financial heavyweights.

Earnings Reports

Earnings season is in full swing, and investors are closely monitoring the financial performance of companies across various sectors. On Friday, we can expect earnings reports from major financial institutions such as JPMorgan Chase and Bank of America, as well as UnitedHealth and Delta Air Lines. These reports will provide valuable insights into the health and profitability of these companies, which can significantly impact their stock prices.

Inflation Data

Inflation has been a significant concern for investors in recent months. The latest consumer price index report, scheduled for release on Thursday, will shed light on the current inflationary environment. Economists polled by Dow Jones expect CPI to have risen by 3.2% year over year in December. This data will be closely scrutinized as it may influence the Federal Reserve’s decisions regarding interest rates.

Cryptocurrency Market

The cryptocurrency market has been experiencing volatility, with bitcoin prices declining as the U.S. Securities and Exchange Commission clarified that it has not yet approved bitcoin ETF trading. Cryptocurrency exchange Coinbase and Marathon Digital saw their stock prices fall by more than 1.5% each following this announcement. It’s essential for investors in the cryptocurrency space to stay updated on regulatory developments and market trends to make informed decisions.

Bankruptcy Filings and Business Failures

While bankruptcy filings at the end of 2023 may sound alarming, it’s crucial to examine the data more closely. Capital Economics suggests that a significant portion of the filings were tied to the WeWork bankruptcy, and excluding those, Chapter 11 filings actually declined last quarter. This trend aligns with weak rather than negative GDP growth, indicating that the worst may already be behind us. Data from S&P Global also supports this notion, with business failures among larger firms decreasing since the summer. However, it’s important to remain cautious, as the risk of a material pick-up in bankruptcies still exists.

Sector Analysis

RBC Capital Markets recently downgraded the technology sector to market weight, citing expensive valuations for the median stock in the sector. While the sector continues to exhibit positive revisions in earnings and sales forecasts, it has become increasingly overvalued in recent months. Simultaneously, RBC upgraded the consumer discretionary sector to market weight and utilities to overweight, as these sectors offer more attractive valuations and can benefit from positive EPS revisions.

Communication Services Sector

The SPDR Communication Services Sector Fund (XLC) has reached a 52-week intraday high, driven by the performance of mega-cap companies such as Meta and Alphabet. These companies have also hit 52-week highs, contributing to the overall growth of the sector. However, it’s worth noting that most XLC components are negative on the day, indicating some mixed performance within the sector.

2024 Market Outlook

Barclays predicts a “higher, yet more sober” equity market in 2024. While the market is expected to see some upside, the bar for positive surprises has been raised following an exceptional year-end rally. The equity rally is expected to slow down, leading to a period of healthy consolidation. Valuations and earnings could potentially create upside potential, but the direction of interest rates remains uncertain.

Stocks Making Moves

Several stocks have been making notable moves in the market today. Here are some of the significant developments:

1. TG Therapeutics: The biopharmaceutical stock jumped 11.7% after providing preliminary net product revenue for its multiple sclerosis treatment.
2. Intuitive Surgical: The medical stock popped 4.9% after reporting stronger-than-expected fourth-quarter revenue and an increase in procedures using its da Vinci systems.
3. Bloom Energy: Shares climbed 4.3% following an upgrade to outperform by Baird.
4. WD-40: The company reported better-than-expected results for the fiscal first quarter, leading to a more than 5% increase in shares.
5. Lennar: The homebuilder raised its annual dividend and announced plans to buy back up to an additional $5 billion in stock, resulting in a 2% increase in stock price.

Bitcoin ETFs and Fee Reductions

The battle to lower fees on bitcoin ETFs continues, even though these funds have not yet been approved. Ark Invest and 21Shares recently announced that the proposed fee for their bitcoin ETF would be reduced from 0.25% to 0.21%. Similarly, BlackRock’s iShares Bitcoin Trust has proposed a fee reduction from 0.30% to 0.25%. These fee reductions aim to make bitcoin ETFs more attractive to investors once approved.

Market Open

As the trading session began, the S&P 500 rose 0.1%, the Dow Jones Industrial Average gained 32 points, or 0.1%, and the Nasdaq Composite advanced 0.2%. The market’s performance during the trading session will be influenced by various factors, including earnings reports and economic data.

Conclusion

Staying informed about the stock market today is essential for investors looking to make informed decisions. By monitoring market performance, earnings reports, inflation data, and other key factors, investors can better navigate the dynamic landscape of the stock market. Additionally, understanding sector analysis, bankruptcy filings, and cryptocurrency market trends can provide valuable insights. As the market continues to evolve, it is crucial to stay updated on the latest news and trends to make informed investment decisions.

Disclaimer: The information provided in this article is for informational purposes only and should not be considered as financial advice. Investing in the stock market carries inherent risks, and individuals should conduct thorough research and consult with a financial advisor before making any investment decisions.