Market Snapshot
briefing.com
| Dow | 37715.04 | +25.50 | (0.07%) | | Nasdaq | 14765.94 | -245.41 | (-1.63%) | | SP 500 | 4742.83 | -27.00 | (-0.57%) | | 10-yr Note | -28/32 | 3.946 |
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| | NYSE | Adv 1313 | Dec 1478 | Vol 921 mln | | Nasdaq | Adv 1880 | Dec 2431 | Vol 5.8 bln |
Industry Watch
| Strong: Health Care, Utilities, Energy, Consumer Staples, Real Estate, Financials |
| | Weak: Information Technology, Industrials, Communication Services, Consumer Discretionary |
Moving the Market
-- Profit-taking after nine-week win streak
-- Loss in Apple (AAPL) after downgrade to Underweight from Equal Weight at Barclays, citing weakness in iPhone sales volume among other factors
-- Geopolitical angst after Iran sent a warship to the Red Sea after the U.S. destroyed three Houthi boats
-- Some strength under the index surface; Value stocks, bank stocks, and defensive-oriented stocks are outperforming
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Closing Summary
02-Jan-24 16:30 ET
Dow +25.50 at 37715.04, Nasdaq -245.41 at 14765.94, S&P -27.00 at 4742.83
[BRIEFING.COM] The stock market entered 2024 on a mixed note. Profit-taking activity in the mega cap stocks, and other stocks that outperformed last year, weighed over the broader market following nine-straight weeks of gains to close out 2023.
Apple (AAPL 185.64, -6.89, -3.6%) was an influential loser, dropping more than 3.0% today after a Barclays downgrade to Underweight from Equal Weight. The Vanguard Mega Cap Growth ETF (MGK) declined 1.8%.
Still, the major indices held up okay due to some underlying strength in areas of the market that were either left out of the last year's gains or saw less robust gains compared to mega cap stocks. The market-cap weighted S&P 500 fell 0.6% today while the Invesco S&P 500 Equal Weight ETF (RSP) closed just above Friday's closing level. The Russell 3000 Value Index rose 0.3% today while the Russell 3000 Growth Index declined 1.5%.
The only three S&P 500 sectors to register a decline in 2023 saw some of the largest gains today. The utilities sector, which fell 10.2% last year, logged a 1.4% gain today. The energy sector, which declined 4.8% in 2023, climbed 1.2% today. The consumer staples sector, which fell 2.2% last year, closed with a 1.2% gain today.
The health care sector was another top performer today, registered a 1.8% gain. It was also among the worst performing sectors last year, eking out a 0.3% gain.
On the flip side, weakness in their mega cap constituents weighed on the heavily-weighted information technology (-2.6%), consumer discretionary (-0.9%), and communication services (-0.9%) sectors. The industrial sector was another laggard, dropping 1.0% today.
The Treasury market experienced some selling despite increased geopolitical worries in the Red Sea after Iran sent a warship there in response to the U.S. destroying three Houthi boats. The 2-yr note yield rose eight basis points to 4.33% and the 10-yr note yield rose seven basis points to 3.95%.
- Dow Jones industrial Average: +0.1%
- Nasdaq Composite: -1.6%
- S&P 500: -0.6%
- Russell 2000: -0.7%
- S&P Midcap 400: -0.3%
Reviewing today's economic data:
- December S&P Global US Manufacturing PMI - Final 47.9; Prior 49.4
- November Construction Spending 0.4% (Briefing.com consensus 0.6%); Prior was revised to 1.2% from 0.6%
- The key takeaway from the report is the strength seen in new single-family construction, which is badly needed as the supply of existing homes on the market remains severely constrained.
Wednesday's economic calendar features:
- 7:00 ET: Weekly MBA Mortgage Index (prior -1.5%)
- 10:00 ET: December ISM Manufacturing Index (Briefing.com consensus 47.1%; prior 46.7%) and November job openings (prior 8.733 mln)
- 14:00 ET: December FOMC Minutes
Treasury yields settle lower to start the year
02-Jan-24 15:30 ET
Dow -56.10 at 37633.44, Nasdaq -300.47 at 14710.88, S&P -41.40 at 4728.43
[BRIEFING.COM] The three major indices are moving sideways near session lows.
The A-D line is negative now, but it was positive throughout most of the session. Decliners have a roughly 4-to-3 lead over advancers at the NYSE and a 3-to-2 lead at the Nasdaq.
Elsewhere, Treasury yields settled higher to start the new year. The 2-yr note yield rose eight basis points to 4.33% and the 10-yr note yield rose seven basis points to 3.95%. The U.S. Dollar Index rose 0.9% to 102.20.
Wednesday's economic calendar features:
- 7:00 ET: Weekly MBA Mortgage Index (prior -1.5%)
- 10:00 ET: December ISM Manufacturing Index (Briefing.com consensus 47.1%; prior 46.7%) and November job openings (prior 8.733 mln)
- 14:00 ET: December FOMC Minutes
Stocks decline; Energy complex settles mixed
02-Jan-24 15:00 ET
Dow -80.39 at 37609.15, Nasdaq -309.12 at 14702.23, S&P -43.22 at 4726.61
[BRIEFING.COM] Stocks have settled into a steady decline. The Nasdaq Composite is down 2.0%.
Energy complex futures settled the session in mixed fashion. WTI crude oil futures dropped 1.4% to $70.53/bbl and natural gas futures climbed 3.0% to $2.39/mmbtu.
On a related note, the S&P 500 energy sector is up 1.4%.
Netflix, PTC among top laggards in S&P 500 to open 2024
02-Jan-24 14:30 ET
Dow -29.63 at 37659.91, Nasdaq -277.86 at 14733.49, S&P -35.50 at 4734.33
[BRIEFING.COM] The S&P 500 (-0.74%) is in second place to start 2024, down about 35 points and approaching today's lows.
Elsewhere, S&P 500 constituents Norwegian Cruise Line (NCLH 18.43, -1.61, -8.03%), Netflix (NFLX 464.93, -21.95, -4.51%), and PTC (PTC 167.41, -7.55, -4.32%) dot the bottom of today's standings. NCLH falls amid a shift in sentiment owing to tensions in the Red Sea as well as a cautious research report in the sector, NFLX dips as reports circulated over the weekend about streaming customers canceling services.
Meanwhile, Moderna (MRNA 112.03, +12.58, +12.65%) is atop the index, strong amid an upgrade to Outperform at Oppenheimer.
Gold bucks trend, ends higher to begin 2024 despite dollar, yield strength
02-Jan-24 14:00 ET
Dow +7.07 at 37696.61, Nasdaq -264.14 at 14747.21, S&P -28.76 at 4741.07
[BRIEFING.COM] The tech-heavy Nasdaq Composite (-1.76%) is near the bottom of today's range with about two hours to go on Tuesday.
Gold futures settled $1.60 higher (+0.1%) to $2,073.40/oz, resisting the trend lower amid a higher dollar and gains in yields, aided in part by geopolitical concerns over attacks on ships in the Red Sea.
Meanwhile, the U.S. Dollar Index is up +0.8% to $102.18.
Page One
Last Updated: 02-Jan-24 09:00 ET | Archive
Market downshifts to start 2024
Before we start your new (trading/investing) year on a sour note, allow us to remind you that the major indices have a nine-week winning streak. That streak has produced some massive gains, which led to the happiest end of the old year.
Briefly, the Nasdaq Composite soared 43.4% in 2023, the S&P 500 surged 24.2%, the Russell 2000 was up 15.1%, the S&P Midcap 400 rose 14.5%, and the Dow Jones Industrial Average gained 13.7%.
Now, for the sour news: the S&P 500 futures are down 38 points and are trading 0.7% below fair value, the Nasdaq 100 futures are down 182 points and are trading 1.0% below fair value, and the Dow Jones Industrial Average futures are down 237 points and are trading 0.5% below fair value.
The major indices, therefore, will be starting 2024 on a down note -- certainly at the start of today's trading.
Notwithstanding the extended winning streak, we are not sure this negative disposition is all that surprising to market participants, who recognized that there was some performance chasing at the end of 2023 and that some profit taking was bound to happen in the wake of a parabolic advance.
Barclays has helped given market participants a profit taking nudge by downgrading Apple (AAPL) to Underweight from Equal Weight due in part to concerns about weak iPhone sales volumes.
Shares of AAPL are down 2.2% in pre-market trading. In fact, most of the mega-cap stocks are down in pre-market trading and that is taking its toll on the futures for the major indices.
You can sense this morning's profit-taking urge, too, in the behavior of NVIDIA (NVDA) and Uber (UBER). Stifel named NVIDIA a "best idea" for 2024, but NVDA is down 0.3% in pre-market trading; meanwhile, Wells Fargo labeled Uber a "top pick," yet UBER is down 1.1% in pre-market trading.
Another convenient reason for some of the early profit taking is the bump seen in Treasury yields. Recall that the Treasury market went on its own tear at the end of 2023, but it is starting 2024 on the defensive despite geopolitical tension in the Red Sea growing more tense after Iran sent a warship there in response to the U.S. destroying three Houthi boats.
WTI crude futures are up 2.3% to $73.27/bbl.
Currently, the 2-yr note yield is up 10 basis points to 4.35% and the 10-yr note yield is up nine basis points to 3.97%. The U.S. Dollar Index, however, looks to be reflecting a bit more of the geopolitical angst. It is up 0.7% to 102.05.
The Treasury market should be a hotbed of trading interest this week, which will also feature the release of the December ISM Manufacturing Index, JOLTS - Job Openings Report, and the FOMC Minutes on Wednesday followed by the December Employment Situation Report and ISM Non-Manufacturing Index on Friday.
-- Patrick J. O'Hare, Briefing.com
DoorDash begins 2024 a tad sluggish on reports of planned expansion beyond core business (DASH)
DoorDash (DASH -3%) is a tad sluggish to start 2024, as shares retreat modestly following an FT report that the food delivery company is looking to expand beyond its primary U.S. restaurant business. Building its categories beyond restaurants, both domestically and abroad, was DASH's central focus to start last year after closing its approximately €7.0 bln acquisition of food and merchandise delivery platform Wolt during the summer of 2022. Given DASH's market leadership in the U.S. within the food delivery business, it is advantageous for the company to keep its foot on the gas, capitalizing on its sturdy global footprint and diversifying its revenue streams further.
- Outside the U.S., DASH operates in 27 countries, all of which came through its Wolt partnership. In November, DASH noted that despite growing at multiples across several geographies, it was not pleased yet with where its product was, admitting it still has plenty of room left. Compared to the U.S., DASH conceded that it was trailing its core market from a penetration and product adoption perspective. As a result, overseas expansion, whether food delivery or branching out to other channels, would be a focal point in 2024.
- Still, expanding into new verticals was an underlying factor behind DASH's excellent performance in 2023. DASH's new categories business, i.e., deliveries from merchandise vendors, accelerated sequentially in Q3, with the grocery business alone doubling in gross order volume yr/yr. With DASH already commanding a network of drivers, it can improve unit economics at a brisk pace within its new categories business.
- Fragmentation has been a major issue for the food delivery business in recent years, with previous platforms like GrubHub and Postmates acquired by competitors during the pandemic. Given DASH's leadership position, M&A may be a part of its expansion plans to maintain its market dominance and distance itself from its next largest competitors. Therefore, we suspect a few acquisition announcements from DASH this year likely tilted toward overseas expansion.
There will still be speed bumps this year, primarily from cumulative inflationary pressures and weight-loss drugs. On the latter, management has not noticed an impact, echoing remarks from several executives across various organizations within the food industry lately. CEO Tony Xu added that it is still too early to tell whether the drugs will act as a headwind, tailwind, or sidewind. On inflation, DASH is feeling it on the cost side through certain regulations surrounding minimum wage and on the demand side with consumers tightening their wallets as student loan payments resume and widespread inflation clips discretionary income. However, DASH has talked about already enduring peak inflation, which has continued to rise at a slower pace throughout the latter half of 2023.
Nevertheless, with turnaround momentum at its back, DASH seeks to capitalize on an excellent 2023, putting its capital to work through efficient investments and possible M&A.
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