Hey there, readers!
As we kick off the new year, it's time to dive into the exciting world of stocks, finance, and market predictions. January is known as the tea-leaf-reading season on Wall Street, where traders try to decipher the market's direction for the entire year based on its early beginnings.
So, what can we expect in 2024? Let's take a closer look.
Thursday's trading provided little indication of what's to come, with the Dow Jones Industrial Average rising a modest 10.2 points, or 0.03%. The S&P 500 declined 0.34%, and the Nasdaq ended down 0.56%.
However, some market observers will read into the S&P 500's 1.7% fall so far this year. According to the Wall Street Journal, when the S&P 500 rises in the first month of the year, its average return for the remainder is 9.2%, and it has a positive return 78% of the time. Conversely, when it drops in January, the average return for the rest of the year falls to 2.1%.
But there are other signs offering a contrary forecast. The small-cap focused Russell 2000, for instance, rallied 12% in December. In the past, when it rose more than 10% in December, it was higher a year later in 14 out of 20 cases, with an average gain of 15.8%. Unfortunately, it's down 3.2% so far in January.
Of course, the most significant indicator of what's to come could be Friday's jobs report for December. Economists expect around 170,000 jobs to have been added. A reading in line with or slightly below that number could spark a rally, reinforcing expectations that the Federal Reserve will soon start cutting rates. However, a weak reading could reignite talk of a dreaded recession.
So, buckle up, fellow finance enthusiasts! The year ahead promises to be full of twists and turns in the market. Stay tuned for more updates and analysis as we navigate the exciting world of stocks and investments. Let's make 2024 a profitable year!
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