US Stocks Kick of the Year with a Hit – Nasdaq Down 1.6%
Investor confidence for a surging 2024 took a bit of hit yesterday as the Nasdaq dropped 1.63 on the first trading day of the year. It is a very long haul ahead but the initial moves for the first day of trading were more cautious than some would have hoped for. It was not all bad news as the Dow held steady on the day, closing up just 0.07%, the S&P slumped 0.57% with the tech heavy Nasdaq losing 1.63% led by Apply taking a significant hit on a downgrade from Barclays. The dollar stepped up strongly gaining 0.83% on the index as the Euro dropped 0.9% on the day. US treasury yields also gained back some of their recent declines, the benchmark 10-year trading back above 4% early in the day before settling at 3.93% by the close. Oil and Gold both dropped lower in as the dollar appreciated with Oil making a harder move on the back of persistent tensions in the Red Sea.
Traders Looking Ahead at Data for Direction
It may be stating the obvious, but traders are looking at data as the new years begins to give them direction and set fresh trends for 2024. There is a growing feeling that the optimism from the fed’s December pivot has now been absorbed by the market and we will see swinging markets on a daily basis on Fed expectations until we see some data to back up one view point or another. Big US data kicks off tonight for the year with some key job’s numbers due out, but the real test will come on Friday with the release of the latest non-Farms numbers. Investors will be hoping for more confirmation of a resilient yet softening market to allow for the much vaulted ‘soft landing’, but any surprises from this week’s data or indeed in the weeks ahead could see volatility pick up swiftly.
Big Day Ahead for Traders
It is set to be a big day ahead for traders as we see the first major data releases of the new year out of the US as well as the Fed Meeting Minutes from last month. There is nothing really set to trouble the scorers in the first two sessions of the day but there are a raft of risk events that could see markets off and running once New York opens. The ISM Manufacturing PMI data is due out along with the first jobs number of the week, the JOLTS Job Openings, but probably more importantly we have last months FOMC Meeting Minutes due near the end of the session. Given the moves that we have seen since the Fed’s pivot, these will be examined with a fine toothcomb and any disparities with market perception could see more volatility ahead.
