Market Drama
Featuring Zoe CEO & Founder, Andres Garcia-Amaya, CFA
Watch Time: 4.5 minutes
Welcome to this week’s Market Drama!
Stock Market Update:
- S&P 500 was down 1.9% for the week. Down 1% for the year.
- Nasdaq was down even more, 2.3% for the week. Down 0.8% for the year.
- Barclays Agg. Index was down 0.9% for the week. Down 0.4% for the year.
- When economic data comes in hotter than expected:
- Stock markets tend to sell off.
- Bond yields rise.
- Service Sector PMI increased to 54.1 in December (anything above 50 means growth).
- Nonfarm Payrolls for December were 256k (above expectations of 165k).
- Unemployment rate fell to 4.1 from 4.2.
- Wage growth stands at 3.9%, outpacing CPI inflation—a positive trend.
- Average hourly wage growth rose 3.9 year-over-year (below forecast of 4.0).
- Fed Rate Cuts Outlook:
- Expectations for further rate cuts have decreased as the economy remains strong.
- Markets now predict one cut to 4–4.25% by year-end, instead of rates dropping below 4%.
- Impact on Stocks:
- This adjustment isn’t overly bearish for mid-to-long-term stock performance.
- Markets focus more on earnings growth, which remains strong.
- Earnings Growth:
- S&P 500 is projected to report 11.7% earnings growth for the last quarter, the highest since Q4 2021.
- A reaccelerating economy supports continued earnings growth, benefiting the market overall.
Next Week:
- CPI data.
- Retails Sales data.
Stay tuned for next week.
– Andres
Disclosure: This material provided by Zoe Financial is for informational purposes only. It is not intended to serve as a substitute for personalized investment advice or as a recommendation or solicitation of any particular security, strategy or investment product. Nothing in these materials is intended to serve as personalized tax and/or investment advice since the availability and effectiveness of any strategy is dependent upon your individual facts and circumstances. Zoe Financial is not an accounting firm- clients and prospective clients should consult with their tax professional regarding their specific tax situation. Opinions expressed by Zoe Financial are based on economic or market conditions at the time this material was written. Economies and markets fluctuate. Actual economic or market events may turn out differently than anticipated. Facts presented have been obtained from sources believed to be reliable. Zoe Financial, however, cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source.