Weekly Market Brief: January 2, 2024

Week in Review

Stocks put the finishing touches on 2023 with their ninth straight week of gains. For the S&P 500, that matches the longest win streak since 1985. For the Dow, one more week of gains would match the longest stretch of consecutive increases since 1965. Stocks weren’t the only place to make money: Gold prices ended the year above $2,000/oz for the first time ever, and Bitcoin finished 2023 more than 150% higher than the year before. Crude oil, however, wasn’t able to finish quite as strong - it dropped 2.6% in the final week to close 8.6% lower for the year.

It was undoubtedly a great year for stock market returns, but it’s easy to lose sight of the forest when you’re surrounded by trees. Since the end of 2021, the S&P 500 has gained a whopping 0.08%. The Dow Jones Industrial Average is up just 3.72% over that timeframe, and the NASDAQ Composite, despite a 43% return in 2023, is still 4% below where it finished 2 years ago.

Market Internals

Breadth was a concern for most market watchers throughout 2023, as the rally in growth stocks obscured lackluster performances from value-oriented names during the spring and late-summer months. Index-level declines in August, September, and October had breadth as weak as it had been all year. A surge in prices to end the year laid any lingering concerns about participation to rest. Three-quarters of S&P 500 members are above their 200-day moving average, and more than 80% of members are in short-term uptrends.

Long-term trends are healthiest in the Financials, Industrials, Information Technology, and Real Estate sectors, where more than 85% of constituents have moved above their long-term moving averages. Traditionally considered a risk-off area, the Consumer Staples sector is the most weakly positioned. Just 34% of stocks in that group are in long-term technical uptrends.

What's Ahead

Here's what to watch in the week ahead: