Stock Market Recap: January 12, 2024

The stock market had a mixed performance yesterday, with world shares showing a diverse range of movements. Tokyo’s benchmark index, the Nikkei 225, continued its New Year rally, reaching its highest level since 1990. Meanwhile, other global markets experienced varying degrees of gains and losses. Let’s take a closer look at the performance of the major benchmarks, economic data releases, and the approval of spot bitcoin ETFs by the SEC.

How Did the Benchmarks Perform?

Dow Jones Industrial Average (DJI)

The Dow Jones Industrial Average (DJI) closed at 37,711.02, up 15.29 points. Throughout the trading session, the blue-chip index experienced significant fluctuations, reaching an intraday high of nearly 106 points and an intraday low of over 270 points. Out of the 30 stocks comprising the index, 15 ended the day in positive territory, while the remaining 15 closed in the negative zone.

Nasdaq Composite

The tech-heavy Nasdaq Composite finished at 14,970.18, gaining a mere 0.54 points. This marked the fifth consecutive day of positive closing for the index. Technology giants such as Palo Alto Networks Inc. (PANW) and Netflix Inc. (NFLX) contributed to the positive performance, advancing by 2.3% and 2.9%, respectively. Netflix currently holds a Zacks Rank #2 (Buy).

S&P 500

The S&P 500 ended the day at 4,780.24, registering a 0.1% decline. During intraday trading, the benchmark briefly surpassed its previous record closing high of 4,796.56, which was recorded in January 2022. While nine out of the 11 sectors in the index closed in negative territory, the Technology Select Sector SPDR (XLK) rose by 0.5%. On the other hand, the Utilities Select Sector SPDR and the Real Estate Select Sector SPDR (XLRE) experienced declines of 2.3% and 0.9%, respectively.

CBOE Volatility Index (VIX)

The fear-gauge CBOE Volatility Index (VIX) decreased by 2% to 12.44. This index measures the expected market volatility. On Thursday, a total of 11.41 billion shares were traded, which was lower than the 20-session average of 12.27 billion. Declining stocks outnumbered advancing stocks on the NYSE by a ratio of 1.3-to-1, while on the Nasdaq, the ratio favored declining issues at 1.8-to-1.

CPI Remains Strong

The Department of Labor reported that the Consumer Price Index (CPI), a key measure of inflation, rose by 0.3% month-over-month in December. This exceeded the consensus estimate of 0.2%. In November, the CPI had increased by 0.1% month-over-month. The CPI for the year 2023 rose by 3.4%, surpassing the consensus estimate of 3.2%. However, compared to 2022, the inflation gauge increased by around 6.4%.

In December, the Core CPI, which excludes the volatile food and energy items, also increased by 0.3%, in line with expectations. Year-over-year, the Core CPI rose by 3.9% in December, surpassing the consensus estimate of 3.8%. It is worth noting that the year-over-year Core CPI reading in December was the lowest since May 2021.

Other Economic Data

The Department of Labor reported that weekly jobless claims decreased by 1,000 to 202,000 for the week ended January 6. This figure was lower than the consensus estimate of 210,000. The data from the previous week was also revised upward to 203,000 from the initially reported 202,000. Continuing claims, which represent individuals who have already received government unemployment benefits and run a week behind the headline number, came in at 1.834 million for the week ended December 30. This represented a decrease of 34,000 from the previous week.

SEC Approves Spot Bitcoin ETF

In a landmark decision, the U.S. Securities and Exchange Commission (SEC) approved rule changes to allow the creation of spot bitcoin exchange-traded funds (ETFs). This decision is expected to pave the way for the launch of 11 bitcoin ETFs throughout the year. Previously, the SEC had been hesitant to approve spot bitcoin ETFs, but the situation changed after the SEC lost a lawsuit to Grayscale in August 2023.

SEC Chairman Gary Gensler, who has been critical of cryptocurrencies, has now positioned the entire crypto space as an integral component of mainstream finance. This approval provides individuals, money managers, and other financial institutions with exposure to the world’s largest cryptocurrency without the need to own it directly.

Financial Disclaimer

The information provided in this stock report is for informational purposes only and is not intended for trading purposes. The report does not constitute investment advice, nor is it an offer or solicitation of an offer to buy or sell any securities or other financial instruments. All information, including stock prices, market data, company fundamentals, and analyst ratings, is provided on an “as is” basis for informational purposes only, and is not intended for trading purposes or advice.

Past performance of the stocks mentioned in this report is not indicative of future results. Investing in stocks involves risks, including the loss of principal. Investors should consider their investment objectives and risks carefully before investing. The content of this report is not intended to provide legal, tax, or financial planning advice, and investors are advised to consult with a qualified professional for this type of advice.

All investments involve risks, including the possible loss of capital. The author and publisher of this report are not liable for any actions taken as a result of this report. It is recommended that readers conduct their own independent analysis or consult a qualified financial advisor before making any investment decisions.

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