The stock market started the year on a negative note, with index futures pointing to a lower opening on Wednesday. This continued negative sentiment is due to several market-moving catalysts, including the release of the Fed minutes, a Federal Reserve speech, and JOLTS data. However, analysts remain optimistic that momentum will carry through into 2024 as headwinds subside.
In Tuesday’s trading, technology stocks led the market lower as investors sold off stocks amid concerns about valuations and uncertainties regarding the economy’s trajectory in the new year. The tech-heavy Nasdaq Composite and the broader S&P 500 Index both settled down, while the Dow Industrials finished marginally higher with gains in healthcare and financial stocks offsetting weakness in the technology sector.
Despite the pullback, some analysts see this as a buying opportunity. Louis Navellier, a fund manager, believes that weakness in the market should be considered as buying opportunities, especially for big tech stocks. He is optimistic about the upcoming earnings season and expects strong economic growth in the fourth quarter.
Looking ahead, futures performance on Wednesday indicates a further decline in the market. Nasdaq 100, S&P 500, and Dow futures all show negative performance. In premarket trading, the SPDR S&P 500 ETF Trust (SPY) fell 0.35% to $471, and the Invesco QQQ ETF (QQQ) slid 0.52% to $400.49.
There are several upcoming economic data releases that could impact the market. Richmond Fed President Thomas Barkin is scheduled to speak, and the Labor Department will release the results of the November Jobs Opening and Labor Turnover survey. The Institute of Supply Management will also release its manufacturing purchasing managers’ index. Additionally, the Fed will release the minutes of the December monetary policy meeting.
In terms of individual stocks, Jazz Pharma, Inc. (JAZZ) rallied nearly 25% in premarket trading after receiving an Outperform rating from Baird. Verizon Communications Inc. (VZ) rose nearly 1% following an upgrade from KeyBanc analysts. Moderna, Inc. (MRNA) is also expected to see follow-on buying, with the stock rising premarket. Other key companies, such as Resources Connection, Inc. (RGP) and Cal-Maine Foods, Inc. (CALM), are set to report their quarterly results after the market close.
In global markets, major Asian markets fell due to the tech-induced setback on Wall Street, although the Chinese Shanghai Composite Index eked out a modest gain. European stocks also pulled back on Wednesday amid rising risk appetite.
Overall, the stock market continues to face challenges at the beginning of the year, but analysts remain hopeful that momentum will pick up as headwinds subside. Investors should closely monitor upcoming economic data releases and individual stock performances to make informed decisions.
