USA: Weaker start of the year on Wall Street, Nasdaq had its worst day since October

Tuesday’s session on Wall Street, the first in 2024, ended with a majority of declines, and the Nasdaq index recorded its worst day since October last year. Despite a weaker start to the year, analysts remain optimistic about the prospects for American stock markets in the coming months.

The Dow Jones Industrial was up 0.07% at the close. and amounted to 37,715.04 points.

The S&P 500 fell by 0.57% at the end of the day. and amounted to 4,742.83 points.

The Nasdaq Composite lost 1.63%. and closed the session at 14,765.94 points.

According to analysts, weaker sentiment is historically quite common on the first day of trading, especially after the rally at the end of the previous year. This is noted, among others, by: Infrastructure Capital Management CEO Jay Hatfield.

“These are completely normal, somewhat expected actions. “It’s a normal seasonal pattern that we have a tax loss in the period before the end of the year and then a profit in the period after,” Hatfield told CNBC.

“I would say that the flash point was also the Apple downgrade,” he added.

Apple shares fell more than 3 percent during Tuesday’s session. after Barclays downgraded its recommendation for the company’s shares to “underweight” from “neutral”.

Despite this slight decline in the first session of the year, Hatfield remains bullish on stocks in the new year. He expects the stock to bottom out once earnings season gets underway.

This week, investors will learn the minutes of the December meeting of the US Federal Reserve and the US payrolls report.

“If the minutes reveal that interest rate cuts have been a major topic of discussion among policymakers and if Friday’s labor market data indicates further weakness in the labor market, investors may be tempted to increase their bets on rate cuts,” said Charalampos Pissouros, senior investment analyst on XM.

According to the FedWatch tool, owned by CME Group, investors value almost 90 percent. chances of suspending interest rate increases at the January meeting and approximately 82 percent. chances of a 25 bp rate cut. at the March meeting. Money markets are pricing in less than 150 bps. easing of monetary policy by the US Federal Reserve in 2024.

“The biggest real risk for stocks is not that the Fed or ECB will not cut as much as expected, but rather that corporate earnings will suffer a larger-than-expected decline in an environment of more moderate GDP growth and declining price power,” he wrote in report by Adam Crisafulli, founder of Vital Knowledge.

During Tuesday’s session, shares of companies classified as defensive sectors gained, including Johnson & Johnson and Merck.

Shares of cryptocurrency-related companies such as Coinbase Global and MicroStrategy rose several percent each as bitcoin breached the $45,000 ceiling for the first time since April 2022.

Major oil companies such as Exxon Mobil and Chevron gained slightly as oil prices rose after a naval clash in the Red Sea raised the risk of supply disruptions in the Middle East. On Sunday, U.S. Navy helicopters from the USS Eisenhower aircraft carrier strike group fired upon Houthi rebels who were trying to board a Maersk container ship.

On Monday, stock exchanges around the world were closed for the New Year. The Dow and S&P 500 ended the year with increases of over 13%, respectively. and 24 percent The Nasdaq recorded an increase of approximately 43%.

Technology companies were the leaders in growth last year. Apple gained 48% throughout 2023, Microsoft increased by almost 57%, and Nvidia gained 239%. on the wave of fashion for solutions related to artificial intelligence and demand for semiconductors.

The PMI index, determining the economic situation in the American industrial sector, prepared by S&P Global, amounted to 47.9 points in December. compared to 49.4 points in the previous month – given in the second calculation. The initial estimate was 48.2 points.

Tuesday’s session on the crude oil market started with slight increases, but then investors started taking profits. February WTI futures are trading at $70.41 per barrel, down 1.73%, and March Brent futures are down 1.45%. up to USD 75.92/b. (PAP Business)

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