(New York = Yonhap News) Lim Ha-ram, Yonhap Infomax Reporter = This week (22nd to 26th), the New York stock market is expected to try to rise, continuing the strong trend of the previous week.
Last week, the Standard & Poor’s (S&P) 500 index topped the 4,800 mark, reaching a two-year high.
The Nasdaq index, which focuses on technology stocks, also rose more than 2% over the past week, settling in the 15,000 range.
Stock market bull sentiment appears to have revived amid artificial intelligence (AI) expectations.
In particular, the stock prices of huge technology companies (Big Tech) increased on the New York Stock Exchange.
Last week, the stock prices of NVIDIA and Meta Platforms reached record highs.
Nvidia’s stock price rose 20% in just 13 trading days this year. Meta Platforms’ stock price has risen nearly 8% this year. Microsoft, whose stock price rose more than 6% this year, caught up with Apple’s market capitalization and became the world’s most valuable company at one point.
The stock prices of Google’s parent company, Alphabet A shares, and Amazon have risen more than 4% and 2%, respectively, this year.
Apple’s stock price plunged due to a series of bad news from the start of the year, but has recently rebounded after receiving criticism from Wall Street that the stock price adjustment was excessive. However, among major tech stocks, Tesla’s stock price has fallen nearly 15% this year.
Stock market experts predicted that the positive trend in the stock market, which had slowed down briefly at the beginning of the year, could continue for some time as the strong trend has revived.
The S&P 500 index has already raised its level by around 38% compared to the low point recorded in October 2022.
Analysis suggests that the trend of a bull market in the New York stock market has been confirmed, with the index rising more than 20% from its low point and hitting a new high.
The argument is that the index may experience a slight adjustment depending on the identification of the high point, but since the stock market is in a bull market, the adjustment may only be in the short term.
In addition, as the S&P 500 index breaks through the important resistance level of 4,800, the stock market may receive technical upward momentum.
Ari Wald, a technical analyst at Oppenheimer, a Wall Street investment bank, analyzed that when stock prices reached new highs in the past, they showed a particularly positive trend 3 to 12 months later.
In particular, the fact that the New York stock market has risen recently despite the increase in bond interest rates reveals a strong upward momentum in the market.
The US 10-year bond yield rose close to 4.2% at one point last week. However, the New York stock market showed a tendency to break record highs despite the rise in bond interest rates.
However, experts warned that if the 10-year bond interest rate is above a certain level, it could pour cold water on the risk appetite of the stock market.
Bond yields are rising amid market perception that a US Federal Reserve (Fed) interest rate cut may come later than expected.
Although the financial market is preemptively reflecting about five to six interest rate cuts this year, many Federal Reserve officials have suggested that the interest rate cut may be delayed longer than expected.
Raphael Bostic, president of the Federal Reserve Bank of Atlanta, mentioned that the Fed’s first interest rate cut of the year will occur around the third quarter. San Francisco Fed President Mary Daley warned it was premature to think a rate cut was imminent. Austan Goolsbee, President of the Chicago Fed, also said that inflation indicators need to be checked further before making a decision on interest rate cuts.
This week, ahead of the Federal Reserve’s Federal Open Market Committee (FOMC) meeting in January, key Federal Reserve officials will enter a ‘blackout’ period when they will refrain from making public comments.
This week, the US Federal Reserve’s discretionary price indicator will be published.
According to the Wall Street Journal (WSJ), the core personal consumption expenditure (PCE) price index in December last year is expected to have risen by 0.2% from the previous month. This means that the inflation rate is steeper than the previous month’s increase of 0.1%. However, the core PCE price index in December is expected to rise by just 3% compared to the same period last year, showing a lower growth rate than the previous month’s figure of 3.2%.
Financial market participants are likely to be relieved if inflation continues to slow, but if inflation rebounds, this could hamper stock market strength.
This week, the US growth rate for the fourth quarter of last year will be published. According to WSJ, growth in the fourth quarter is expected to hit 1.7%. This is significantly lower than the growth rate of 4.9% in the third quarter of last year.
If the US growth rate is slower than expected, concerns about an economic hard landing may increase.
However, another variable is that market participants are hoping that the economy will slow down to some extent in order to quickly reduce interest rates. Although economic indicators in the United States have been generally robust recently, some in the market present the analysis that ‘good news is bad news’, where strong economic indicators act as bad news for the market. This is because if the economy is showing signs of strength, the Fed does not need to cut interest rates in a hurry.
In addition, the number of weekly unemployment insurance claimants, leading economic indicators, and purchasing managers’ index (PMI) indicators are also published.
Full-scale performance announcements by companies were also scheduled. The earnings of major US telecommunications companies Verizon and AT&T, and consumer goods companies Johnson & Johnson (J&J) and Procter & Gamble (P&G) are announced. Airlines, including credit card company American Express, American Airlines, and Southwest Airlines, are also scheduled to announce their earnings.
S&P 500 index reaches record high
Yonhap News file photo
◇ Key indicators and speech schedule
-22nd
December’s leading economic index
-23rd
January Richmond Federal Reserve Manufacturing Index
Performance of General Electric (GE), Verizon, J&J, P&G, Lockheed Martin, etc.
-24 days
Standard & Poor’s (S&P) preliminary manufacturing and non-manufacturing PMI figures for January
AT&T Performance, Kimberly Clark, etc.
-25 days
Weekly Unemployment Insurance Claimants
Latest news on gross domestic product (GDP) for the 4th quarter
Durable goods orders were received in December
New home sales in December
December Chicago Fed National Economic Activity Index (CFNAI)
January Kansas City Fed Manufacturing Manufacturing Index
European Central Bank (ECB) base interest rate decision.
Performance of Blackstone, American Airlines, Southwest Airlines, Comcast, etc.
-26th
December Personal Consumption Expenditure (PCE) and Personal Income
December tentative home sale
American Express performance
hrlim@yna.co.kr
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2024/01/21 07:00 Sent
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