Market Recap: Week of JAN. 15 - JAN. 19, 2024

Gordon Achtermann |

The S&P 500 rose 1.2% this week to a record close amid strong gains in the technology sector and a bullish outlook from a chip-industry bellwether.

The index ended Friday's session at 4,839.81 after reaching an all-time intraday high of 4,842.07, surpassing its prior record reached two years ago of 4,818.62. Its previous record close, also reached in January 2022, was 4,796.56.

Last Friday, the market benchmark closed at 4,783.83. The week-over-week advance came in just four sessions as the market had been closed on Monday for the Martin Luther King Jr. holiday.

Taiwan Semiconductor Manufacturing said it expects full-year revenue growth in the low-to-mid-20% range. The outlook is considered a key indicator of chip industry health as the company's chips are used in Apple (AAPL) iPhones as well as Qualcomm (QCOM) mobile chipsets and Advanced Micro Devices' (AMD) processors, among others.

Amid the bullish chip industry signal, the technology sector led the week's climb with a 4.3% increase, followed by a 1.9% rise in communication services. Other gainers included financials, consumer discretionary and industrials.

The technology sector's gainers included chip industry companies Advanced Micro Devices, up 19%, Western Digital (WDC), up 9.5%, and Applied Materials (AMAT), up 11%.

In communication services, shares of Walt Disney (DIS) rose 3.0% as the entertainment company's board rejected the nominations by activist shareholders Trian Fund Management and the Blackwells Group, and endorsed 12 nominees for directors.

On the downside, utilities fell 3.7%, followed by a 3.1% drop in energy and a 2.1% decline in real estate. Other sectors that fell included materials, consumer staples and health care.

I would note that Energy is the worst performing sector over the last year. All those stories about the demise of ESG investing rely on statistics from when fossil-fuel stocks soared due to war in Ukraine. However, middle-eastern instability could push oil prices back up again so I will refrain from making any predictions.

Decliners in the utilities sector included Eversource Energy (ES), down 6.1%, and NextEra Energy (NEE), down 6.2%. NextEra plans to release its Q4 results on Thursday.

Other companies scheduled to report quarterly financial results next week include United Airlines Holdings (UAL), Johnson & Johnson (JNJ), Procter & Gamble (PG), Netflix (NFLX), Tesla (TSLA), Abbott Laboratories (ABT), International Business Machines (IBM), Verizon Communications (VZ), AT&T (T), Visa (V), Intel (INTC), Union Pacific (UNP), American Express (AXP) and Colgate-Palmolive (CL).

Key economic data expected next week will include a preliminary reading on Q4 gross domestic product on Thursday as well as the December personal consumption expenditures price index, a closely watched inflation reading.



Italicized content is my own editorial.


All the Best!

Gordon Achtermann, CFP®