Daily Market Report 12-28-2023

Daily Market Report

As of 11:00 A.M. EST


Nasdaq 100 Is Set for Best Year Since Dot-Com Era: Markets Wrap – Bloomberg, 12/28/2023

  • A banner year for stocks is drawing to a close, with gains in big tech leaving the market near all-time highs amid the artificial intelligence exuberance and dovish Federal Reserve bets.
  • With only two sessions left before the final closing bell of 2023, the Nasdaq 100 is poised for its best year since 1999, and the S&P 500 has come even closer to a record.
  • The gauge is roughly 1% below the average full-year gain predicted by analysts in a survey published last week, which forecast the index would end 2024 at 4,833.
  • In a rates-obsessed world, the stock market saw a massive reversal this year after suffering its worst annual selloff since 2008.
  • As traders ramped up bets, the Fed is done with its aggressive hiking campaign — and will start easing policy in 2024 — the global bond market is set for its biggest two-month gain on record.
  • The S&P 500 edged higher on Thursday, extending this year’s advance to around 25%.
  • The Nasdaq 100 rose 0.2%. The Dow Jones Industrial Average rose 0.2%.
  • From Nvidia to Microsoft, the seven-largest US tech stocks were responsible for 64% of the gauge’s rally this year through last week as the AI frenzy took off.
  • The Nasdaq 100 is up 55% in 2023.
  • The ‘Magnificent Seven’ — which also includes Amazon.com, Apple, Google parent Alphabet, Meta Platforms, and Tesla — are expected to post 22% earnings growth next year, twice the S&P 500’s advance, data compiled by Bloomberg Intelligence show.
  • The key is how much of that is already baked into share prices, especially with expectations for a soft-landing building.
  • About a week ahead of the all-important US jobs report, traders were unfazed by data showing initial jobless claims rose to 218,000.
  • Economists forecast a still-healthy 170,000 increase in December payrolls, consistent with resilient labor demand that has been key in powering the economy.
  • Separate data showed a gauge of pending US existing-home purchases held at a record low in November.
  • The Stoxx Europe 600 was little changed.
  • The Bloomberg Dollar Spot Index fell 0.3%.
  • The yield on 10-year Treasuries advanced two basis points to 3.81%.
  • West Texas Intermediate crude fell 1% to $73.34 a barrel.

Apple Resumes Sale of Watches After Appeals Court Lifts US Ban – Wall Street Journal, 12/28/2023

  • Apple said it would put its latest smartwatch models back on sale in its US retail stores Wednesday after it won a court ruling in a patent fight, providing a quick reprieve for its $17 billion business.
  • The company said its Apple Watch Series 9 and Ultra 2 would also resume online sales by noon Pacific time on Thursday.
  • The US International Trade Commission had banned the import and sale of the products at Apple’s official channels after it ruled in favor of Masimo, a medical device maker, in a patent infringement case.
  • An appellate court in Washington issued an interim stay of the ITC’s decision earlier Wednesday while Apple sought to overturn the decision.
  • The company said that the watches will be back on shelves beginning Wednesday at some of Apple’s about 270 retail locations across the country, with wider availability by Saturday.
  • Apple also has developed a software update for the Apple Watch that it believes will mitigate the issue.
  • It submitted the design of that update to the US customs agency and said the government is scheduled to decide on January 12 whether to approve the changes.

Boeing urges 737 MAX inspections for possible loose bolt – FAA – Reuters, 12/28/2023

  • The Federal Aviation Administration (FAA) said Thursday that airplane maker Boeing is urging airlines to inspect newer 737 MAX airplanes for a possible loose bolt in the rudder control system.
  • The FAA said it was “closely monitoring” Boeing 737 MAX targeted inspections and will consider additional action based on any further discovery of loose or missing hardware.
  • Boeing recommended inspections after an international operator discovered a bolt with a missing nut while performing routine maintenance on a mechanism in the rudder-control linkage, the FAA said.
  • Boeing discovered an additional undelivered aircraft with a nut not properly tightened, the agency said.
  • The FAA said Boeing had issued a message urging operators of newer single-aisle airplanes to inspect specific tie rods that control rudder movement for possible loose hardware.

A Top Penn Entertainment Shareholder Seeks Board Seats – Wall Street Journal, 12/28/2023

  • A top shareholder in Penn Entertainment is seeking seats on the casino operator’s board.
  • The hedge fund HG Vora Capital Management, which has an 18.5% economic interest, including swaps, is in talks with Penn about placing directors on the company’s board, according to a securities filing made on Thursday, which didn’t say how many. (Its latest 13F filing revealed an 11% stake in Penn.)
  • Should the talks not lead anywhere, the fund might pursue a proxy fight, according to people familiar with the matter.
  • Penn’s window for nominating director candidates ahead of its 2024 shareholder meeting runs from January 8 through February 7, according to proxy materials.
  • Penn’s board members serve on staggered terms, coming up for election every three years, and two have held a seat for more than two decades.

Gas Prices Are Expected to Fall Further in 2024 – Wall Street Journal, 12/28/2023

  • Drivers have another reason to shout, “Happy New Year!” this Sunday: lower prices predicted at the pump.
  • The annual national average price of unleaded gasoline is forecast to drop to $3.38 a gallon in 2024, down from $3.51 this year, according to a GasBuddy report released Thursday.
  • Gas prices, which currently average $3.12 a gallon according to AAA, may decline below $3 by the end of winter before climbing again as summer approaches.
  • Drivers in most major cities will see prices peak at or slightly below $4 a gallon this summer.


US Pending Home Sales Index Holds at Lowest Level on Record – Bloomberg, 12/28/2023

  • A gauge of pending US existing-home purchases held at a record low in November, indicating a weak resale market beset by a lack of inventory and high prices.
  • The National Association of Realtors’ index of contract signings to purchase previously owned homes was unchanged at 71.6, the lowest in data from 2001.
  • The median estimate in a Bloomberg survey of economists called for a gain of 0.9%.
  • Pending home sales decreased 5.1% from a year earlier on an unadjusted basis.
  • The index of contract signings for existing homes declined in the South, the biggest US housing market, to the lowest level on record.
  • Pending sales climbed in the other three regions.

US Initial Jobless Claims Rise to 218,000, More Than Estimated – Bloomberg, 12/28/2023

  • Initial applications for US unemployment benefits increased in the week leading up to Christmas while remaining at a level that is consistent with a resilient labor market.
  • First-time claims rose by 12,000 to 218,000 in the week ended December 23.
  • The four-week moving average, which offers a clearer picture of the trend, was little changed at 212,000 last week, the lowest since late October.

  • Continuing applications, a proxy for the number of people collecting unemployment benefits, rose to 1.88 million the week prior.
  • On an unadjusted basis, initial claims increased by 31,570 to 272,610.
  • California, Missouri and New Jersey led the advance, while claims fell the most in Texas.
  • Economists forecast a still-healthy 170,000 increase in December payrolls, consistent with resilient labor demand that has been key in powering the economy.

Child-Care Costs at $56,000 Force Parents Into Side Hustles – Bloomberg, 12/28/2023

  • A dramatic increase in child-care costs since the pandemic is forcing parents to find new ways of making ends meet, from working part-time at a daycare for a discount to driving for a ride-share service on weekends.
  • Monthly payments for childcare were 32% higher in September than the pre-pandemic average, according to an analysis of the lender’s customer data by the Bank of America Institute.
  • The average cost in the US for full-time, in-home infant care like a nanny is around $39,270 per year, according to Care.com data, and is even higher in cities like New York and San Francisco, where the expense can top an eye-watering $45,000 or $56,000, respectively.
  • Center-based care can also be pricey: In cities like Washington, care for a toddler at a center can exceed $24,000 annually.


Brazil’s Annual Inflation Tops All Economist Estimates in Early December – Bloomberg, 12/28/2023

  • Brazil’s annual inflation slowed less than expected early this month, highlighting the difficulties facing central bankers as they cut interest rates while attempting to haul prices to the tolerance range by year’s end.
  • Official data released Thursday showed consumer prices rose 4.72% in mid-December from a year earlier, above all forecasts in a Bloomberg survey with a 4.56% median estimate.
  • Monthly inflation hit 0.40%.
  • Transportation costs rose 0.77% on the month, while food and beverages gained 0.54%.
  • More expensive airline tickets explain most of the surprises in the mid-December inflation print.
  • The monetary authority targets annual inflation at 3.25% this year and 3% in 2024, with a tolerance range of plus or minus 1.5 percentage points.

Xiaomi Unveils Its First EV, With Ambition to Be China’s Porsche or Tesla – Bloomberg, 12/28/2023

  • The billionaire co-founder of Xiaomi Corp. unveiled the company’s first electric vehicle Thursday, declaring ambitions to become a top global carmaker in 15 to 20 years and compete against Tesla and Porsche.
  • The SU7, which stands for Speed Ultra, rolled onto a stage at the China National Convention Center in Beijing with no drivers visible, ending a presentation by CEO and co-founder Lei Jun in front of thousands of people.
  • Lei spent hours detailing the car’s features, including a range of up to 800 kilometers (500 miles) on a single charge, adjustable spoilers, unique colors, and a top speed of 265 kilometers an hour.
  • The five-seat sedan will be powered by batteries from Chinese market leaders Contemporary Amperex Technology and BYD, depending on whether it has a single or dual motor configuration.
  • The Model S starts at 698,900 yuan and the Taycan at 898,000 yuan, which is much higher than the medium price bracket of 200,000 yuan to 300,000 yuan that many expect the SU7 to fall into.
  • Xiaomi hasn’t yet said how much the SU7 will cost. Lei hinted that it wouldn’t be 99,000 yuan, as some on social media had joked. He said that cars with the same specs often go for 400,000 yuan or more.

South Korea Chip Output Jumps in Sign of Returning Global Demand – Bloomberg, 12/28/2023

  • South Korea’s semiconductor industry recorded the largest gains in years in production and shipments, underscoring a revival of technology momentum that bodes well for the nation’s economic outlook next year and the global tech sector.
  • Chip production jumped 42% in November from a year earlier, the most since early 2017, while shipments soared 80%, the biggest gain since late 2002, according to data released Thursday from the National Statistical Office.
  • The numbers suggest South Korea’s most important industry is roaring back from a slump that weighed on the economy for more than a year and add to optimistic signals for chipmakers such as Samsung Electronics and SK Hynix, two of the country’s biggest companies.
  • The figures also suggest a nascent recovery in global tech sector demand may be gaining momentum.
  • Inventories expanded by 36%, with the smallest rise since February.

Japan to Make Third Attempt at Launching H3 Rocket in February – Bloomberg, 12/28/2023

  • Japan plans to launch its flagship H3 rocket in February following two failed attempts to inaugurate the craft during what was a woeful 2023 marred by costly missteps and major setbacks.
  • The H3 rocket should now take off from the Tanegashima Space Center in southern Japan between 9:20 a.m. and 1:00 p.m. local time on Feb. 15.
  • The 63-meter-tall heavy payload rocket, built by Mitsubishi Heavy Industries Ltd., represents Japan’s latest attempt to capitalize on the growing demand for launch vehicles in the global space industry.
  • The Japan Aerospace Exploration Agency (JAXA) wants it to compete with the Falcon 9, the reusable rocket from Elon Musk’s SpaceX as it is more commonly known.
  • While the H3 has some parts that can be recycled, the Japanese rocket is single-use only.
  • The H3 is meant to replace the H2-A, which was first introduced in 2001 as the country’s flagship rocket.

Tensions Between Israel and Iran Heighten Fears of a Larger Conflict – Wall Street Journal, 12/28/2023

  • Iranian-backed militants and Israeli forces traded fire across Israel’s northern border while Israeli leaders warned that time was running out for diplomatic efforts to defuse tensions in that area, heightening fears that the war in Gaza could spill into a broader regional conflict including Lebanon and Syria.
  • “The stopwatch for a diplomatic solution is running out,” said Benny Gantz, a senior member of the Israeli war cabinet, on Wednesday.
  • “If the world and the Lebanese government don’t act in order to prevent the firing on Israel’s northern residents and to distance Hezbollah from the border, the Israeli military will do it.”
  • The Israeli military said it returned fire on Wednesday after Hezbollah militants in Lebanon fired rockets into Israel.
  • A separate Israeli airstrike on Wednesday killed three people, including two Lebanese-Australian citizens.
  • An Iranian-backed Iraqi militia claimed responsibility for an uncrewed aircraft carrying explosives that crash-landed into part of the Golan Heights annexed by Israel.
  • Israel on Thursday intercepted another uncrewed aircraft from Lebanon in the Krayot area of northern Israel, the military said.
  • The escalation in violence along Israel’s northern frontiers is raising concerns that its war with Hamas in Gaza could spiral into an all-out confrontation with Lebanon’s militant Hezbollah movement and a range of other Iranian-allied militant groups across the region.

Factmonster – TODAY in HISTORY

  • Westminster Abbey consecrated. – 1065
  • John C. Calhoun became the first vice president in U.S. history to resign from office. – 1832
  • Iowa became the 29th state in the United States. – 1846
  • William F. Semple patented chewing gum. – 1869
  • Congress officially recognized the Pledge of Allegiance. – 1945
  • Elizabeth Jordan Carr, the first American test-tube baby, was born in Norfolk, Va. – 1981

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. Historical performance is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

All investing involves risk including loss of principal. No strategy assures success or protects against loss. Any economic forecasts set forth may not develop as predicted. 

All company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services.

Material presented is excerpts derived from third party content and you may need a subscription to access the full the content. The views and opinions expressed are those of the authors and do not necessarily reflect the views of Pence Financial Group or LPL Financial.

Prior to making any investment decision, please consult your financial advisor regarding your specific situation.