Note: Figures recorded at 7:40am AEDT. Updated figures and a video recording will be available at 9am AEDT.
The S&P 500 closed at an all-time high on Friday as investors returned to buying equities in force following a short-lived market stumble to start the new year.
The broad market index rose 1.23% to settle at 4,839.81, surpassing both the prior record intraday and closing highs from January 2022. Meanwhile, the Dow Jones Industrial Average, which set its own record at the end of last year, added 395.19 points, or 1.05%, to end at 37,863.80. The Nasdaq Composite advanced 1.70% to 15,310.97. The smaller, more tech-focused Nasdaq-100 gained 1.95% to also hit a record high.
All three major averages are now in positive territory for 2024, with the 30-stock Dow going green during Friday’s rally.
Following a 19% loss in 2022, the S&P 500 roared back in 2023, posting a 24% gain as the economy skirted a recession that many had expected and inflation came down to levels that allowed the Federal Reserve to pause its interest rate hikes. The benchmark came close to reaching a record following a forceful fourth-quarter rally, but ultimately fell short. The market rally paused a bit to start 2024 as investors took some profits in the Big Tech leaders like Apple.
But they returned to buying those tech leaders in recent days. Friday’s milestone confirms that the stock market is officially in a bull market that began in October 2022, and not just a bounce within a bear market. The S&P 500 is up more than 35% since that low.
The tech sector gained 2.35% on Friday and more than 4% during the trading week, making it the S&P 500′s best-performing sector week to date. Consumer Staples and Utilities were the only US sectors that closed lower.
Fresh consumer data on Friday indicated that consumers are becoming more confident on the economy and inflation. The University of Michigan’s Survey of Consumers showed a 21.4% year-over-year jump to reach its highest level since July 2021.
Insurance company Travelers rose 6.7% after posting an earnings beat. Schlumberger gained 2.2% after beating on top and bottom lines, and Ally Financial surged over 10% after reporting strong quarterly results and a sale of a business unit to Synchrony Financial.
In crypto news, Bitcoin and Ether experienced gains in sync with the stock market's rally, driven by positive consumer sentiment and slowing inflation. Despite this bounce, Bitcoin is still set to record a 4% weekly loss and has fallen 10% since the approval of Bitcoin ETFs on January 10th. Ether is also on track to finish the week with a 3% loss, but these crypto movements did not significantly impact equities, as several related stocks remained relatively flat.
In commodity-related news, oil prices saw a slight decline on Friday but recorded a weekly gain due to heightened tensions in the Middle East. The West Texas Intermediate contract for February settled down 0.9%, while the Brent contract for March settled down 0.68%. U.S. crude achieved a one-week gain of 1%, with investors closely monitoring the possibility of supply disruptions resulting from militant attacks in the Red Sea, while the global benchmark increased by 0.47% for the week.
Turning to the Australian landscape, with Australian economic data still a week away, traders are turning to offshore indicators. Notable reports from the US, including Q4 GDP and core PCE deflator, will influence monetary policy decisions. Additionally, New Zealand's quarterly consumer price index is expected to show a 0.5% increase, lowering annual inflation to 4.7%, below the Reserve Bank's forecast.
Futures
The SPI futures are pointing to a 0.4 per cent rise.
Currency
One Australian dollar at 7.30am was buying 65.92 US cents.
Commodities
Gold added 0.37 per cent. Silver lost 0.42 per cent. Copper gained 1.11 per cent. Oil fell 0.90 per cent.
Figures around the globe
European markets closed mixed. London’s FTSE added 0.04 per cent, Frankfurt fell 0.07 per cent, and Paris closed 0.40 per cent lower.
Turning to Asian markets, Tokyo’s Nikkei added 1.40 per cent, Hong Kong’s Hang Seng fell 0.54 per cent and China’s Shanghai Composite closed 0.47 per cent lower.
On Friday, the Australian share market closed 1.02 per cent higher at 7,421.24.
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Eildon Capital Group (ASX:EDC)
Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.
