Big Movers In December 2023
Norwegian Cruise Line (NCLH): The cruise-ship operator continued to rebound as fuel costs and interest rates fell.
Aon (AON): The insurance broker agreed to purchase NFP for $13 billion, funding almost half the transaction by issuing new stock.
Enphase Energy (ENPH): The solar-energy stock gained on hopes of bigger tax credits. It also cut costs by laying off workers and closing factories.
Oracle (ORCL): The software company’s revenue missed estimates. Some analysts also forecast weaker cloud-computing growth.
Walgreen Boots Alliance (WBA): The healthcare company rebounded from a 25-year low after rival CVS Health issued strong guidance.
Pfizer (PFE): The drug maker hit a 10-year low on weaker-than-expected guidance.
Key Economic Events Last Month
Job Growth, Unemployment Beat Forecasts
Non-farm payrolls increased by 199,000 jobs in November, beating forecasts for growth of 180,000. Unemployment unexpectedly fell to 3.7% and wages grew more than projected. (8/12)
Fed Signals More Rate Cuts in 2024
The Federal Reserve suggested its target rate may fall 50 basis points more than previously indicated in 2024. Policymakers also acknowledged for the first time that inflation had “slowed” in a meeting that appeared more dovish than most investors anticipated. (13/12)
Homebuilding Rebounds
Housing starts unexpectedly increased by 15% in November to their highest level in six months. The report suggested builders are responding to a shortage in homes and lower mortgage rates. (19/12)
Consumer Confidence Jumps as Inflation Eases
Consumer confidence rose more than forecast to its highest level since July. The survey reflected optimism about inflation, job availability and personal income. (12/12)
Key Futures Contracts
| Product Name | Current Month | Expiration | Next Month | 1-Mon% |
|---|---|---|---|---|
| S&P 500 E-Mini (@ES) | ESH24 (Mar) | 15 Mar 24 | ESM24 (Jun) | +4% |
| *S&P 500 E-Mini Micro (@MES) | MESH24 (Mar) | 15 Mar 24 | MESM24 (Jun) | +4% |
| Nasdaq-100 E-Mini (@NQ) | NQH24 (Mar) | 15 Mar 24 | NQM24 (Jun) | +5% |
| *Nasdaq-100 E-Mini Micro (@MNQ) | MNQH24 (Mar) | 15 Mar 24 | MNQM24 (Jun) | +5% |
| Dow Jones E-Mini (@YM) | YMH24 (Mar) | 15 Mar 24 | YMM24 (Jun) | +4.4% |
| *Dow Jones E-Mini Micro (@MYM) | MYMH24 (Mar) | 15 Mar 24 | MYMM24 (Jun) | +4.4% |
* Micro contracts are one-tenth the size of standard e-minis.
Events to Watch This Month
| Date | Event | What to Watch |
|---|---|---|
| Fri, 5-Jan | Employment report | Job-market conditions: unemployment, wages, hours worked. |
| Thu, 11-Jan | Consumer price index (CPI) | Inflation trends |
| Fri, 12-Jan | Earnings season begins | Major banks including JPMorgan Chase (JPM) start issuing fourth-quarter results. |
| Wed, 17-Jan | Retail sales | Will sales beat estimates for a sixth straight month? |
| Wed, 31-Jan (Estimated date) |
Fed meeting, press conference | Interest rates, comments on inflation |
Sector Watch
Real estate stocks continued to rise following a historic bounce in November, supported by lower interest rates.
Industrials benefited from a turnaround in Boeing and optimism the U.S. will avoid a recession in 2024.
Consumer discretionary stocks rallied, led by cruise-ship operators and homebuilders.
Energy fell again as oil prices continued lower.
Noteworthy Calls & Predictions
Inflation is headed back to the Fed’s 2% target, policymaker Austan Goolsbee said at an economic conference. He cited normalized supply chains and expected declines in housing costs.
InflationThe S&P 500 could climb to 5400 in 2024 and 6000 in 2025, market strategist Ed Yardeni said. He expects Artificial Intelligence to boost productivity and profits without the economy falling into recession.
S&P 500The Russell 2000 small cap index could appreciate 50% in 2024, Tom Lee of Fundstrat said in an interview of CNBC. He cited lower interest rates and greater risk appetite after the Fed meeting.
Russell 2000The housing market is starting to thaw, according to National Association of Realtors President Tracy Kasper. “A pent-up buyer pool on the sidelines,” wants to purchase homes, she said in an interview on CNBC. However, there’s still a shortage of inventory.
HousingMore than 40% of the S&P 500’s members hit an overbought condition in mid-December, according to Carson Strategist Ryan Detrick. Similar moments, like January 1975 and February 1991, were followed by average yearly gains of more than 25%, he said.
S&P 500Disclosure
The material is provided by TradeStation International Ltd, authorised and regulated by the FCA (554431) in the UK and acting as an introducing broker to affiliated and non-affiliated brokers such as TradeStation Securities, Inc., and Interactive Brokers (U.K.) Ltd. The firm does not provide investment advice or trading recommendations.