Market Recap: Week of JAN. 22 - JAN. 26, 2024

Gordon Achtermann |

Market Recap


The S&P 500 index rose for a third consecutive week as the first reading of Q4 economic growth came in stronger than expected, and some earnings topped estimates.

The index ended Friday's session at 4,890.97, up from the previous week's closing level of 4,839.81, which was a record at the time. The index reached new closing highs each day this week through Thursday, when it closed at 4,894.16. It set a fresh intraday high on Friday at 4,906.69 but ended just below Thursday's record close.

The market benchmark is now up 2.5% for the month and year-to-date.

According to an advance estimate by the Bureau of Economic Analysis, US real gross domestic product rose at an annual rate of 3.3% in Q4. The consensus was for a 2% gain in a survey compiled by Bloomberg. In the third quarter, real GDP grew at an annual rate of 4.9%.

The GDP report came as a number of quarterly earnings reports have surpassed expectations. Companies that posted stronger-than-expected financial results this week included Visa (V), International Business Machines (IBM), Johnson & Johnson (JNJ), and American Airlines (AAL).

The energy sector had the largest percentage increase of the week, jumping 5.1%, followed by a 4.5% gain in communication services and a 1.9% rise in financials. Other gainers included technology, industrials, consumer staples, utilities, and materials.

The energy sector's climb came as crude oil futures rose. Gainers included Halliburton (HAL), which posted fiscal Q4 adjusted earnings per share above analysts' mean estimate despite revenue that was up from the year-earlier period but slightly missed the Street view. Halliburton's shares rose 10% on the week.

In communication services, shares of Netflix (NFLX) jumped 18%. The streaming entertainment company's Q4 revenue exceeded Wall Street's estimates amid stronger-than-anticipated membership growth, and the company said it is entering 2024 with "good momentum."

However, three sectors edged lower on the week: consumer discretionary slipped 1.4%, real estate shed 0.5%, and health care ticked down 0.2%.

Tesla (TSLA) shares led the consumer discretionary sector's decliners amid weaker-than-forecast Q4 results. The electric vehicle manufacturer's shares lost 14% as the company's Q4 report showed its margin nearly halved year over year. The company also issued a warning that its volume growth this year will likely trail the rate achieved in 2023.

Next week's earnings calendar features companies including Microsoft (MSFT), Google parent Alphabet (GOOGL), Advanced Micro Devices (AMD), Mastercard (MA), Boeing (BA), Apple (AAPL), (AMZN), Meta Platforms (META), Merck (MRK), Exxon Mobil (XOM) and Chevron (CVX).

Next week's economic data will focus on January's employment figures, with ADP's monthly employment report scheduled for Wednesday and the US monthly nonfarm payrolls and unemployment rate due on Friday.


All the Best!

Gordon Achtermann, CFP®