The first week of 2024 is officially in the books — and with it, the end of a nine-week winning streak on Wall Street. The S&P 500 fell about 1.5% during the holiday-shortened trading week. The Nasdaq was the worst performer this week, losing more than 3% as Magnificent Seven and other 2023-winning technology stocks sold off. The Dow Jones Industrial Average fared better, falling just 0.6% this week, with non-technology stocks emerging . Sharp market declines on Tuesday and Wednesday also dampened Santa Claus’s rally, with the last five trading days in December and the first two days in January down 1.3%. Since 1969, the decline has occurred during what has historically been the best consecutive seven-day period of the year only 13 times. When Santa doesn’t appear on Wall Street, stocks tend to fall later in the year. We don’t make trading decisions based on seasonal indicators, but they are fun to point out. Looking at this week’s trading, the decline has been very orderly with many 2023 winners pulling out as the action expands to include healthcare, utilities, energy and financials. These were the only sectors that rose during the week. The pressure last year’s winners were under was not too surprising. We even did some decorations to start the new year. While the stock market was closed on Monday for New Year’s, the week saw some key economic numbers, including the monthly employment report released by the government on Friday. Nonfarm payrolls for December rose by a stronger-than-expected 216,000. However, this strength was tempered somewhat by downward revisions for October and November, which combined amounted to 71,000 fewer jobs than previously reported, and of a larger magnitude than December’s pace. Also working against the market for further signs of contraction, average hourly earnings rose 4.1% year over year in December, above the expected 3.9% annual advance and a slight acceleration from the 4% rate of advance seen in November. Outside the labor market, there were conflicting readings regarding the manufacturing sector. The Institute for Supply Management on Wednesday released its December manufacturing report. It came in at 47.4%, which indicates continued contraction. Although it was slightly better than economists had expected, it was down from November’s reading of 46.7%, indicating an accelerating rate of contraction. On the other hand, factory orders, released on Friday, indicated a rebound, rising a stronger-than-expected 2.6% in November compared to a 3.4% decline in October. Looking ahead to next week, it’s all about inflation and the official start of the fourth quarter earnings season. Economy: The two main economic releases for next week are the Consumer Price Index (CPI) on Thursday and the Producer Price Index (PPI) on Friday. The CPI, a broad measure of retail inflation, carries more weight because it talks about the prices paid by consumers. This is what the Fed cares most about as it seeks to implement its dual mission of promoting price stability and maximizing employment. However, the PPI is still important because it provides insight into input costs, which companies can choose to pass on to consumers to protect profits – and in a vicious cycle, this leads to higher CPI readings in the future. Economists were looking for a 3.2% annual increase in the headline CPI and a 3.8% increase in the core rate, which excludes the more volatile food and energy sectors. As for the Producer Price Index, annual increases of 1.3% in headlines and 2% in fundamentals are expected. Wall Street wants to see more progress in the Fed’s fight against inflation to keep central bankers in a comfortable frame of mind. Three rate cuts were expected after the Fed’s December 2024 meeting. Earnings: Club name Wells Fargo will report fourth-quarter results before the opening bell on Friday. We hope to see the strength in the third quarter continuing into the last three months of last year. While these numbers will close the book on 2023, we’ll be looking at preliminary forecasts for net interest income and expenses in 2024. We expect that much of the focus will be on the expense guide as management still has work to do to reduce annual operating costs. At a higher level, we’re interested to hear management’s thoughts on the bank’s exposure to the distressed office real estate sector and what they’re doing to de-risk that part of the balance sheet. Any additional details on the increased capital requirements would also be welcomed – along with confirmation, as we had last time, that the bank is well placed to hold more capital if necessary while continuing to return cash to shareholders through dividends and share buybacks. . We continue to believe it is a matter of “when, not if” regulators lift the asset cap placed on Wells Fargo after prior offenses. Investors, like us, will listen carefully to any movement on this front. Monday, January 8 Before the bell: Helen of Troy (HELE) After the bell: Accolade (ACCD), Jefferies Financial (JEF) Tuesday, January 9 Before the bell: Albertsons (ACI) After the bell: PriceSmart (PSMT), WD-40 (WDFC) Wednesday, 10 January After the Bell: KB Home (KBH) Thursday, January 11 at 8:30 AM ET: CPI 8:30 AM ET: Initial Jobless Claims Before the Bell: Infosys (INFY) Friday, January 12, 8:30 AM ET Eastern: PPI before the bell: Wells Fargo (WFC), JPMorgan (JPM), Bank of America (BAC), Bank of New York Mellon (BK), BlackRock (BLK), UnitedHealth (UNH), Delta Air Lines ( DAL) (See here for a complete list of stocks in Jim Cramer’s Charitable Trust.`) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after a trade alert is sent before buying or selling a stock in his charitable fund’s portfolio. 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Traders work on the floor of the New York Stock Exchange (NYSE) on the first day since the Christmas holiday on December 26, 2023 in New York City.
Spencer Platt | Getty Images News | Getty Images
The first week of 2024 is officially in the books — and with it, the end of a nine-week winning streak on Wall Street.