Wall Street continues to rise and add to its record high, with the S&P 500 up 0.2% and the Dow Jones Industrial Average rising 0.
4%. Macy’s stock climbed 2% after rejecting a buyout offer, SolarEdge Technologies rose 4.
8% following its announcement of job cuts, and NuStar Energy jumped 14.6% after a deal with Sunoco.
However, Archer Daniels Midland saw its stock drop 19.7% after putting its CFO on leave and announcing an investigation into its accounting practices.
This week will see a rush of companies reporting their Q4 2023 earnings, with around 70 S&P 500 companies on the calendar, including American Airlines, Intel, Procter & Gamble, and Tesla. Analysts predict an overall decrease in earnings for the quarter compared to the previous year.
Companies that have exceeded forecasted profits and revenue have seen smaller increases in stock prices than usual, while companies that fall short of expectations experience larger stock price declines. This suggests that the market now has higher expectations following a significant rally.
The recent rally in the market has been fueled by hopes of a cut in interest rates by the Federal Reserve due to a moderation in inflation. However, stronger-than-expected economic reports have led traders to push back their expectations for rate cuts, although they still expect more cuts this year than the three suggested by the Fed.
Upcoming economic reports, such as the estimate for Q4 2023 GDP growth and the latest inflation gauge, could further influence expectations for rate cuts. The government’s first estimate for Q4 GDP growth is expected to show a slower pace of growth, which aligns with the Fed’s desire to ease inflationary pressures.
In global markets, Chinese indexes tumbled amid concerns about the country’s economic recovery, with Hong Kong stocks falling 2.3% and Shanghai stocks dropping 2.
7%. Japan’s Nikkei 225 performed better, rising 1.
6% on expectations that the Bank of Japan will maintain low interest rates.