• Financial Directions
• December 23, 2024

Abandoned Beyond Tech Stocks?

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The bustling financial hubs of the United States saw significant movements in the stock markets on December 17thThe day concluded with the three major indices – the Dow Jones Industrial Average, the S&P 500, and the Nasdaq – all showing declines, reflecting a broader trend of market volatility that many are beginning to grapple withThe Dow closed down by 0.61%, marking its ninth consecutive fall and setting a challenging new record not observed since 1978. The S&P 500 followed suit, slipping by 0.39%, while the Nasdaq declined 0.32%. According to CNBC, these downward trends can be partially attributed to a shift in investor focus from traditional economic stocks toward technology stocks, leading to a sell-off in several companies listed on the Dow.

The technology sector showcased notable disparities in performanceTesla's shares saw a remarkable rise of over 3%, while Apple and Microsoft also experienced minor gains, increasing by nearly 1%. However, not all tech giants were basking in the green; Nvidia faced a downturn, losing more than 1%, marking its fourth consecutive day of losses

Meanwhile, major players like Facebook, Amazon, and Google also saw slight declines, symbolizing an overall mixed performance within the tech landscape.

Amidst these movements, traditional companies such as UnitedHealth Group and Goldman Sachs fell by more than 2%, taking a toll on the DowOther notable declines included firms such as 3M and Travelers, which dropped over 1%. Conversely, several established brands, including Johnson & Johnson, Coca-Cola, and Nike, managed gains exceeding 1%, providing a slight counterbalance to the day’s predominant negative sentiment.

Opinions within the market suggest that broader economic challenges are loomingDavid Russell, the global markets strategy chief at TradeStation, remarked that Wall Street’s current realizations reflect a more complicated scenario than some investors may wish to admitFinancial and industrial stocks had previously risen sharply, yet they now confront higher interest rates and trade uncertainties, while the healthcare sector faces its own set of political risks that compound investor concerns.

Key factors influencing these market dynamics include the looming Federal Reserve interest rate decision anticipated on the forthcoming Wednesday

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CNBC's analysis highlighted that some of the selling pressure in non-tech stocks is likely linked to traders positioning themselves ahead of this critical announcementThe Chicago Mercantile Exchange's FedWatch Tool indicated a staggering 95% probability that the Federal Reserve would opt for a 25-basis-point cutNonetheless, whispers of caution permeate the market as investors fret that the Fed may misstep, risking the creation of equity bubbles or inadvertently fueling inflation yet againThe retail data released for November hinted at stronger-than-expected consumer spending, which further stoked concerns that the Fed might overreact in its attempts to navigate inflationary pressures.

As 2024 approaches, the investment landscape indicates a concentrated push toward a select group of seven notable tech stocks, a pursuit that is overshadowing movements within other S&P 500 components

Jeff Gilberg, the chief investment officer at Shelter Wealth Management, expressed that this last-minute rally in tech shares is placing additional strain on the broader indices, particularly sidelining the Dow.

Market researcher Larry Benedict connected the dots between these movements, noting a distinctive trend: the S&P 500's connection of declines over the past eleven trading days marks one of the longest such stretches since 2001. This pattern not only indicates a struggling market but also serves as a critical indicator for investors to heed as they navigate these turbulent waters.

On the economic data front, reports unveiled that the retail and food service sales in the U.Sfor November totaled $724.6 billion, reflecting a 0.7% month-over-month increase, surpassing the market's expectations of 0.5%. Similarly, the growth for October was revised upwards from 0.4% to 0.5%. Removing the automotive sector from the equation, retail sales grew by 0.2%, which, while still positive, fell short of the 0.4% anticipated by economists.

Additional reports from the Federal Reserve indicated a slight contraction in U.S

industrial production, recording a 0.1% decrease in November, contrasting sharply against the expected 0.3% increaseThis data also marked a downward revision from the previously reported decline of 0.3% in October, now stated as a 0.4% decrease.

Turning to the housing sector, the National Association of Home Builders published data showing the housing market index for December remained stable at 46, albeit below the expected level of 47. Such indicators signal caution among builders, reflecting broader anxieties in the housing market.

Examining the individual stocks reveals some intriguing dynamicsTesla's stock bucked the trend, climbing 3.64%, while Nvidia continued its downward spiral, falling by 1.22% on the day, illustrating the market's unpredictable nature.

Across the Atlantic, European markets mostly followed a downward trajectory, with Germany's DAX index declining by 0.33%, while the UK's FTSE 100 faced a steeper drop of 0.81%. Interestingly, France's CAC40 managed a slight gain of 0.12%. Reuters reported that investors are keeping a close eye on the Federal Reserve's policy direction, which led to pressure on energy and banking stocks across Europe.

In the commodities markets, international crude oil futures settled nearly 1% lower

West Texas Intermediate (WTI) crude for January dropped by $0.63, resulting in a total of $70.08 per barrelSimilarly, Brent crude for February fell by 0.97%, reaching $73.19 per barrelThe precious metals market also faced headwinds, with prices for gold and silver both decreasing; COMEX gold lost 0.33% to settle at $2,661.20 per ounce, while silver dipped by 0.28%, closing at $30.97 per ounce.

Meanwhile, the U.Sdollar experienced a minor uptickThe Dollar Index, which measures the currency against a basket of six major currencies, increased by 0.09%, concluding the trading session at 106.956. By the end of trading in New York, 1 euro exchanged for 1.0488 dollars, down from the previous day’s 1.0510, while 1 pound bought 1.2711 dollars, slightly above the prior day’s 1.2684. Moreover, the dollar dipped to 153.34 yen from 154.13, and also slightly decreased against the Swiss franc and other currencies, while managing a slight gain against the Canadian and Swedish krona.