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Market Recap & Upcoming Week

2023 concluded with a minor pause in the stock market’s robust upward trajectory.

Despite the S&P 500’s moderate decline last week, the year was marked by a notable 16% rally in its last two months.

This pullback is attributed to early-year portfolio repositioning and a natural consolidation after such a substantial climb.

In the broader context, the outlook for 2024 is tinged with optimism, driven by expectations of favorable Federal Reserve interest rate decisions and a steady economic trajectory.

Nonetheless, the spirited rally into the new year has heightened expectations, potentially setting the stage for market sensitivity to any disappointing developments.

Fresh data on Federal Reserve policy intentions and labor market health emerged last week, indicating a resilient jobs market with a significant addition of 216,000 positions in December, maintaining a stable unemployment rate of 3.7%.

Despite this strength, a gradual softening is anticipated, marked by a reduction in job openings and moderated wage growth, which may temper consumer spending without pushing the economy into a recession.

Meanwhile, the Fed’s December meeting minutes suggest that while interest rate cuts are on the horizon, the market’s anticipation for an early-year cut may be overly optimistic, with policymakers erring on the side of caution and potentially postponing cuts until mid-2024.

Such a cautious approach could lead to short-term market volatility, viewed by some as a potential investment opportunity in anticipation of a supportive shift in Fed policy later in the year.

Investors entering the first complete trading week of 2024 should keep an eye on crucial economic indicators, with inflation data taking center stage.

The Consumer Price Index (CPI) from the Labor Department, a key measure of inflation for consumer goods and services, is scheduled for release on Thursday.

This will be closely followed by the Producer Price Index (PPI) on Friday, which provides insights into wholesale inflation and potentially signals future consumer price trends.

In addition to inflation data, the week will be significant for financial sector watchers as major banks begin to disclose their earnings.

Reports from industry heavyweights like JPMorgan Chase, Bank of America, Wells Fargo, Citigroup, and BNY Mellon will offer a snapshot of the banking sector’s health and set the tone for the earnings season.

Other important data slated for release include consumer credit figures, the federal trade deficit, wholesale inventories, and the National Federation of Independent Business (NFIB) Small Business Optimism Index, each contributing to a fuller picture of the current economic landscape.

Daily Trading Signals (Highlights)

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Subscribe for real-time alerts and weekly videos:
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Market Recap & Upcoming Week

2023 closed on a high note for investors, with all 11 asset classes tracked in a common framework showing positive returns, a stark contrast to the previous year when cash was the only positive asset class.

Bonds, despite a turbulent year, have surged in the past couple of months, offering both attractive income and the potential for more price gains.

This upswing serves as a lesson on the benefits of staying invested, regardless of sometimes grim headlines.

Looking to 2024, the market may face various challenges, but optimism is warranted.

There’s a consensus that interest rates have reached their zenith, with the Federal Reserve setting the stage for potential rate reductions. Inflation appears to be easing, corporate profits are on the mend, and, except for the big gainers of the year, valuations are generally sensible.

As investors return from the New Year’s Day holiday, they face a packed week of economic data releases and a fresh round of corporate earnings.

The Atlanta Federal Reserve’s GDP projection will set the tone, complemented by insights from construction spending and factory orders.

The FOMC minutes release is highly anticipated, offering a deeper dive into the rationale behind the Fed’s latest interest rate decision, which could sway market sentiments.

The week’s highlight is Friday’s employment report, expected to draw significant investor focus, while additional labor market details will emerge from job openings, initial jobless claims, and private-sector employment data.

On the earnings front, Walgreens Boots Alliance, Conagra Brands, and Constellation Brands stand out as major companies reporting this week, potentially impacting market movements.

Daily Trading Signals (Highlights)

Solana (SOL) – Following up on this trade, we bought at around $58, and now it is around $113, giving up a +93% profit in just one month! Congrats to all subscribers who took this trade! 👏🔥📈

For those who missed this, the good news is that the crypto season is just getting started, and many more great opportunities will be coming in 2024.

GBPCHF – Following up on this trade, it managed to hit our first TP of 250 pips profit in just a few days, and went on to 350 pips! (for those who took half profits and used a trailing stop.)

Congrats to those who took this trade! 👏🔥💪

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