Market Update | January 22, 2024

The incredible positive momentum that the U.S. stock market has shown since November is continuing. Heavyweight tech and communication companies are helping to drive key indexes to highs. The S&P 500 Index hit an all-time high today. The index is surpassing its high set on Friday and, previously, just over 24 months ago. The Dow Jones Industrial Average of 30 blue-chip American companies also hit a record today.

It is not every week, or every year for that matter, that we get to report all-time highs in stock markets. Up until last week, there was about a two-year drought of us being able to talk about fresh all-time highs. These are exciting moments for long-term investors who are involved in stock indexes for growth.

But should we be surprised by a fresh all-time high? Reaching this celebratory milepost followed by two snarly years demonstrates the resilience of stock investing as a long-term wealth creation strategy. Despite not being certain that any given year (or several years) will be pleasant, the trend for U.S. stock indexes is higher over time. After all, the U.S. and international economies grow over the long run, simply put, because humanity is innovative and resilient.

On the bond side of the investment world, the bond market is expecting a lower chance of a rate cut by the Federal Reserve anytime soon. Early today, futures trading pegged chances at 99.5% for the Fed to hold rates steady following its January 30-31 meeting. Looking ahead to the Fed’s March meeting, the bond market is pricing in a 48% chance the funds rate will be a quarter-point lower than now, down from 77% a week ago.

Have a good week. Let us know if we can be helpful in your investing journey.

Leave a Reply

Your email address will not be published. Required fields are marked *

Form ADV Part 2A
Form CRS