Mid-Week Market Minute 1.3.24

Stocks Lower to Start Year; Key Economic Data This Week 

Global stocks were marginally lower to start the New Year in this holiday-shortened week of trading. The technology heavy Nasdaq index fell more than 1.5% on Tuesday as Apple (AAPL) shares weighed on the index after an analyst at Barclays downgraded the stock noting lackluster iPhone demand overseas. In bonds, the 2-year and 10-year Treasury notes are currently trading at 4.35% and 3.98%, respectively. The 10-year Treasury now is trading at its highest level since mid-December but is significantly lower in yield from the 5% high reached in mid-October of 2023.

As markets search for direction to begin the new year, investors will shift their attention to key data this week that will factor into future Federal Reserve policy. On Wednesday morning, investors will get a look at manufacturing and employment data, followed by the minutes from the latest FOMC meeting. As of this morning, markets are pricing in about a 90% chance rates will remain unchanged at 5.25%-5.50% at the conclusion of the next Fed meeting on Jan. 31. At the same time, futures data shows about a 75% chance of a rate cut at the following Fed meeting in March. Rounding out the economic data this week will be the jobs report on Friday, where analysts are expecting the U.S. labor market to show nonfarm payroll gains of more than 150,000.

Source: GSAM, CNBC, JPMorgan

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