Market Perspective for December 24, 2023

The week before the Christmas holiday was eventful. On Wednesday, the first important piece of data for the week was released when the Consumer Board released its Consumer Confidence Index. The index came in at 110.7, which was higher than the 104.6 expected by analysts prior to the report’s release. It was also significantly higher than November’s reading of 101.

This would not be the only barometer of consumer confidence that would be released this week. On Friday, the University of Michigan came out with its own index revealing that consumer sentiment had increased from 69.4 last month to 69.7 in December. These figures come on the heels of a drop in the annual inflation rate and comments from Fed Chair Jerome Powell that interest rate cuts may be coming in 2024.

A couple more key reports were released on Thursday as quarterly gross domestic product (GDP) numbers were revealed. During the previous quarter, the economy grew at a rate of 4.9 percent, which was slightly lower than the 5.2 percent predicted by analysts prior to the report’s release. It was also lower than the 5.2 percent reading from the second quarter of 2023. However, that still represents healthy economic growth, leading many to believe inflation can be reined in without a recession.

Also on Thursday, unemployment figures for the last seven days came out, and during that period, 205,000 claims were received, which was up slightly from 203,000 a week ago. It was thought prior to the release that 214,000 people had applied for unemployment benefits since last Thursday.

On Friday, the monthly Core PCE Price Index came out at 8:30 a.m. It showed that prices had gone up .1 percent since November, which was less than the .2 percent that was expected prior to the release. In addition, both durable and core durable orders were up this past month by 5.4 percent and .5 percent respectively.

The Dow was relatively flat for the week finishing up 35.91 points to close at 37,385. On Wednesday, the market made its high of the week at 37,636 while the low was reached on Thursday at 37,186. For the month, the Dow was nearly 2,000 points or 5.65 percent while it finished the year up 4,182 points or 12.6 percent.

Like the Dow, the S&P 500 remained relatively flat for the week finishing up .47 percent to close at 4,754. It would also make its high of the week on Wednesday at 4,776 and its low of the week on Thursday at 4,706. For the month, the S&P is up 4.37 percent and for the year it is up 23.66 percent.

Finally, the Nasdaq was up 1 percent for the week to close at 14,992. Unlike the other two major indices, it would make both its high and low of the week on Wednesday. On that day, the market would reach 15,068 before plummeting all the way to 14,811. Investors who put their money into this index were the big winners for the year as it is up more than 42 percent over the past twelve months.

Internationally, the Bank of Japan kept interest rates steady at -.1 percent while China kept its prime rates on short-term loans at 3.45 percent and long-term loans at 4.2 percent. In Canada, the median inflation rate was 3.4 percent on an annualized basis and .1 percent on a monthly basis. The inflation rate in Great Britain eased to 3.9 percent on an annualized basis while the final inflation rate for the European Union was 2.4 percent.

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