Monthly Market Wrap: January 2024


Welcome back to the Monthly Market Wrap from YCharts, where we break down the most important trends for advisors and their clients in this monthly market review.

January 2024 Market Summary

US stocks posted modest gains to start the year. The Dow Jones Industrial Average rose 1.3%, the S&P 500 advanced 1.7%, and the NASDAQ added 1.0%. Large-caps fared better than Small-caps in January–the Russell 1000 index increased 1.4%, while the Russell 2000 dropped 3.9%. Growth outperformed value within both indices.

Five of eleven sectors had a positive start to 2024. Communication Services was January’s sector leader with a 4.4% gain, followed by Financials at 3.1%. The laggards this month were MaterialsConsumer Discretionary, and Real Estate, the last of which posted a 4.8% decline.

Jump to Equity Performance

The U.S. Economy added 353,000 jobs in January, nearly doubling expectations of 185,000. Unemployment and labor force participation remained unchanged at 3.7% and 62.5%, respectively. New home sales rebounded strongly in December, while mortgage rates stayed the same month-over-month. The 15-year Mortgage Rate was just below 6% as of February 1st.

Jump to Economic Data

Treasury yields had an uneventful start to the year as longer-term treasuries posted slight increases. The 30-year rose 19 basis points to 4.22%, the most of any duration. The 1-month6-month, and 1-year T-Bills all fell by single-digit basis points. The largely muted activity in treasury yield movement translated into little movement by short-term bond ETFs, though the iShares 20+ Year Treasury Bond ETF (TLT) fell 2.3%.

Jump to Fixed Income Performance

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Off the YCharts! Magnificent Seven vs. Magnificent Six

One of the top headlines from 2023 was the outperformance of the “Magnificent Seven” mega-cap stocks: Alphabet (GOOGGOOGL), Amazon (AMZN), Apple (AAPL), Meta Platforms (META), Microsoft (MSFT), NVIDIA (NVDA), and Tesla (TSLA).

However, Tesla has been the underperformer of this group over the past twelve months. The electric vehicle manufacturer has risen 8.1% since last February, and plummeted 24.6% last month alone. This chart shows the divergence of the Magnificent Seven vs. the Magnificent Six, which excludes Tesla. The latter is 12.8 percentage points higher on a TTM basis.

 
TTM

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Equity Performance

Major Indexes

 
major index returns

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index 1.7

Value vs. Growth Performance

 
value vs growth performance

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ticker iwf

US Sector Movement

 
sector movement

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ticker xlc

Hot Stocks: Top 10 S&P 500 Performers of January 2024

 
hot stocks

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symbol jnpr

Laggards & Losers: 10 Worst S&P 500 Performers of January 2024

 
laggards and losers

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symbol tsla

Featured Market & Advisor News

Investors With Advisors Are More Confident, Janus Henderson Survey Says (FA-Mag)

Risk-Reward Profiles of the Best Performing ETFs in 2023(YCharts)

Investors are making more cross-border money moves(InvestmentNews)

A Closer Look at 2023 Fund Flows (YCharts)

Most Advisors Lukewarm Toward SEC-Approved Spot Bitcoin ETFs (WealthManagement.com)

Economic Update: Reviewing Q4 2023 (YCharts)

Economic Data

Employment

January’s unemployment rate stayed unchanged at 3.7%, as did the labor force participation rate at 62.5%. The US unemployment rate has now come in at 3.7% for three consecutive months. 353,000 new jobs were added in January according to nonfarm payroll data, far surpassing the expected increase of 185,000.

Consumers and Inflation

The US inflation rate for December clocked in at 3.35%, marking a slight MoM increase. Inflation has hovered between 3-4% since May. Core Inflation slowed to 3.93% in December, the first time it has fallen below 4% since May 2021. The monthly US Consumer Price Index rose 0.3% in December, and monthly US Personal Spending increased 0.7%. The Federal Reserve held its key Fed Funds Rate at 5.50% at its January 31st, 2024 meeting, marking the Fed’s fourth consecutive meeting in which rates were left unchanged.

Production and Sales

The US ISM Manufacturing PMI jumped two points higher to 49.1 in January, bringing it within one point of crossing into expansion territory. December US Retail and Food Services Sales rose 0.55% MoM, while the YoY US Producer Price Index increased 0.98%.

Housing

MoM US New Single-Family Home Sales rebounded by 7.97% in December after two consecutive monthly declines. However, MoM US Existing Home Sales slipped 1.1%. The Median Sales Price of Existing Homes fell for the sixth straight month to $382,600 in December, a monthly decline of 1.3%, and is 6.7% below its all-time high set in June 2023. Mortgage rates had little movement to start the year; the 15-year Mortgage Rate was 5.94% as of February 1st, and the 30-year stood at 6.63%.

Commodities

The price of Gold declined 2.1% in January to $2,018.50 per ounce. Crude oil prices pushed higher in January; the price of WTI ended the month at $75.84 per barrel while Brent was $83.99, with respective monthly increases of 6.9% and 8.1%. The average price of gas fell 2 cents per gallon in January despite the higher oil prices, closing the month at $3.21/g.

Cryptocurrencies

After a 153.7% surge in 2023, the price of Bitcoin posted a slight increase of 0.7% in January. The price of Ethereum was essentially flat this month, taking a breather after a 91% run higher in 2023. Bitcoin is currently 36.6% below its all-time high set in November 2021, and Ethereum is 51.3% below its record high.

Fixed Income

US Treasury Yield Curve

1 Month Treasury Rate: 5.53%

3 Month Treasury Rate: 5.42%

6 Month Treasury Rate: 5.18%

1 Year Treasury Rate: 4.73%

2 Year Treasury Rate: 4.27%

3 Year Treasury Rate: 4.05%

5 Year Treasury Rate: 3.91%

10 Year Treasury Rate: 3.99%

20 Year Treasury Rate: 4.34%

30 Year Treasury Rate: 4.22%

us treasury yield curve

bond fund performance

ticker bil

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



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About the Author: Tony Ramos

Tony Ramos is a seasoned expert in business funding and real estate investment, with a remarkable journey spanning over 20 years. His expertise in flipping properties and implementing the buy-and-hold strategy has positioned him well in the real estate investment sector. Tony's profound understanding of financial strategies extends to teaching individuals and businesses how to become debt-free and leverage the power of LLCs for funding. For insights, mentorship, or collaboration opportunities, Tony can be reached at businessfundingnopg@gmail.com. Connect with him to unlock the potential of smart financial strategies and embark on a path to financial success and freedom.

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