Market Perspective for December 31, 2023

As expected, the final trading week of the year was rather subdued. There were only a few relatively consequential news items on the calendar as most market participants were taking it easy between the Christmas and New Year’s holidays.

However, this doesn’t mean that nothing of note happened over the last four trading days. On Wednesday, the Richmond Manufacturing Index was released and came in at -11. This was much lower than the -4 analysts had expected to see prior to the release. It was also much lower than the -5 reported in November.

On Thursday, unemployment claims data revealed that 218,000 people filed for benefits in the past seven days. This was an increase of 12,000 claims since last week and was slightly higher than analysts had predicted. Thursday also saw the release of pending home sales over the past month, and since November, pending sales were unchanged. It was thought that sales would increase by .8 percent during the final month of the year.

Finally, on Friday morning, the Chicago PMI was released and came in at 46.9 percent. Analysts had expected a reading of 50.1 percent, which would have still been lower than November’s reading of 55.8 percent.

The Dow finished the year on a high note by closing the week at 37,689, which was an increase of .68 percent. On Tuesday, the market opened at its weekly low of 37,427 and would climb from there until reaching a high of 37,760 on Thursday afternoon. For the year, the Dow finished up 13.7 percent, which is above the historical average of around 8 percent annually. In December, the market made and broke several new all-time highs.

The Nasdaq would finish the week at 15,011, which was a loss of .1 percent compared to the previous week’s close. On Thursday, the Nasdaq made its high of the week at 15,147 and would make its low of the week on Friday of 14,959. Although the Nasdaq was relatively flat for the week, it saw impressive returns for investors during the previous year. For 2023, the index gained 4,544 points, and it is currently sitting roughly 500 points away from the all-time high of 15,537 set in November 2021.

As with the Nasdaq, the S&P 500 was also relatively flat for the week closing up .18 percent to finish at 4,769. In addition, the S&P would copy the Nasdaq in making a weekly high on Thursday and weekly low on Friday. On Thursday afternoon, the market would hit 4,792 before coming back to 4,756 on the final day of trading for 2023. For the calendar year, the S&P 500 would gain 930 points or 24 percent from its 2022 closing price. As with the Nasdaq, the S&P will also be looking to eclipse its all-time high in 2024.

In other markets, oil would make a monthly high above $76 a barrel before falling back to $71.78 on Friday. Gold would make a high of $2,085 an ounce on Thursday before easing back to $2,060 on Friday. The commodity is currently trading near a yearly high of $2,143 that was set earlier in December.

In international news, the Bank of Japan released Core CPI data for the previous month. In November, inflation eased to 2.7 percent on an annual basis compared to 3 percent in October. On Thursday, Spain revealed that its inflation rate has also gone down from 3.2 percent on an annualized basis in October to 3.1 percent in November.

This week should be a far more volatile one as the holiday season comes to a close and trading schedules get back to normal. On Wednesday, the JOLTS report comes out along with minutes from the most recent FOMC meeting. The minutes will likely reveal more insight into both the likelihood and pace of interest rate cuts in 2024.

On Friday, the BLS nonfarm payroll, unemployment rate and wage data for December will be released. The ADP version of the nonfarm payroll report as well as unemployment claims data will be released on Thursday. Finally, ISM Manufacturing and Services reports will be issued on Wednesday and Friday of next week. 

    Your Cart
    Your cart is emptyReturn to Shop