- US stocks closed at a record high for the second day in a row on Monday as bond yields dropped.
- Investors are turning their attention to fourth-quarter earnings results with Tesla and Netflix set to report this week.
- Of the 10% of S&P 500 companies that have reported earnings so far, 65% beat profit estimates.
US stocks jumped on Monday as bond yields tumbled, helping the S&P 500 notch a record close for the second trading day in a row and powering the Dow Jones Industrial Average to close above 38,000 for the first time ever.
Bullishness over rate cuts has dipped but still appears elevated, even as some commentators warn that investors may have gotten ahead of themselves at the end of 2023, when the market surged on hopes the Federal Reserve could cut rates as soon as March. The odds of a March cut have dipped to about 40%, down from over 80% earlier this month.
The 10-year Treasury yield dipped four basis points to 4.103% on Monday.
Investors are now turning their attention to fourth-quarter earnings results, with Tesla and Netflix set to report later this week.
With 10% of the S&P 500 having reported earnings so far, 65% are beating profit estimates by a median of 6%, according to data from Fundstrat. Meanwhile, 62% of those companies beat revenue estimates by a median of 2%.
Investors will focus their sights on economic data later this week with the release of fourth-quarter GDP growth, which should help inform when the Federal Reserve might get started with interest rate cuts this year.
"As far as GDP goes, if the economy is running hotter than expected, we could see a bit of a market sell-off. Traders could interpret a stronger economy meaning that the Fed is not going to start cutting rates and will keep rates higher for longer; conversely, if GDP is weaker than expected, the markets could rally as that could indicate easing monetary policy," Dave Sekera, chief US market strategist at Morningstar told Business Insider.
Here's where US indexes stood at the 4:00 p.m. closing bell on Monday:
- S&P 500: 4,850.43, up 0.22%
- Dow Jones Industrial Average: 38,001.81, up 0.36% (+138.01 points)
- Nasdaq Composite: 15,360.29, up 0.32%
Here's what else happened today:
- China's stock market has lost $6.3 trillion in value since 2021, and there are no signs of a recovery underway as 2024 gets off to a rocky start.
- The Nasdaq Golden Dragon China Index has plunged 14% so far this year and is trading near its lowest level since 2013.
- Buying a diamond is set to get a lot more expensive due to increased demand and lingering supply disruptions from the pandemic.
- The inventor of the market's most famous recession indicator is confident the inverted yield curve is accurately calling a slowdown in 2024.
- The housing market is flashing a handful of bullish signals for the year ahead, according to Compass CEO Robert Reffkin.
- These are the three big things for investors to know as the stock market powers to new record highs, according to Invesco's global strategist.
In commodities, bonds, and crypto:
- West Texas Intermediate crude oil jumped 1.83% to $74.59 a barrel. Brent crude, the international benchmark, climbed 1.60% to $79.82 a barrel.
- Gold fell 0.36% to $2,021.90 per ounce.
- The 10-year Treasury yield dropped three basis points to 4.10%.
- Bitcoin declined by 3.61% to $40,068.