The first week of 2024 is officially in the books, and with it, the end of a nine-week winning streak on Wall Street. The S&P 500 fell about 1.5% during the holiday-shortened trading week. The Nasdaq performed the worst this week, losing more than 3% as stocks of the Magnificent Seven and other 2023 tech winners sold off. The Dow Jones Industrial Average fared better, falling just 0.6% this week , as non-tech stocks took a look. Sharp market declines on Tuesday and Wednesday also thwarted the Santa Claus rally, with the last five trading days of December and the first two of January falling 1.3%. Since 1969, a drop during what has historically been the best seven consecutive day period of the year has only occurred 13 times. When Santa doesn't appear on Wall Street, stocks tend to decline later in the year. We don't make trading decisions based on seasonal indicators, but they are fun to point out. Looking at this week's trading, the decline was fairly orderly with many of the 2023 winners pulling back as the stock broadened into healthcare, utilities, energy and financials. These were the only sectors that rose during the week. The pressure on last year's winners wasn't too surprising. We even made some decorations to start the new year. While the stock market was closed on Monday for New Year's Day, the week featured some key economic numbers, including Friday's monthly government jobs report. Nonfarm payrolls for December grew by 216,000 more than expected. However, that strength was tempered somewhat by downward revisions in October and November, which combined were 71,000 fewer jobs than previously reported, and a magnitude larger than December. Also working against a market looking for more disinflationary signs, average hourly wages rose 4.1% year-over-year in December, above the expected annual gain of 3.9% and a slight acceleration with respect to the rate of advance of the 4% that we saw in November. Outside the labor market, there were conflicting readings on the manufacturing sector. The Institute for Supply Management released its December manufacturing report on Wednesday. It reached 47.4%, indicating continued contraction. Although it was slightly better than economists expected, it was lower than November's reading of 46.7%, indicating an accelerating rate of contraction. On the other hand, factory orders, released on Friday, pointed to a rebound, advancing a stronger-than-expected 2.6% in November, compared to October's 3.4% drop. Looking ahead to next week, it's all about inflation and the official start of fourth-quarter earnings season. Economy: The two main economic releases next week are Thursday's consumer price index (CPI) and Friday's producer price index (PPI). The CPI, a broad measure of retail inflation, carries more weight because it reflects the prices consumers pay. That's what matters most to the Federal Reserve as it seeks to carry out its dual mandate of promoting price stability and maximizing employment. However, the PPI remains important because it provides information about input costs, which companies may choose to pass on to consumers to protect profits and, in a vicious cycle, lead to higher CPI readings in the future. Economists had expected a 3.2% annual advance in the headline CPI and a 3.8% increase in the base rate, which excludes the more volatile food and energy sectors. Regarding the PPI, year-on-year increases of 1.3% in general and 2% in underlying are expected. Wall Street wants to see more progress in the Federal Reserve's fight against inflation to keep central bankers in a relaxed mood. Three interest rate cuts were projected as a result of the December Federal Reserve meeting by 2024. Results: The name of the club, Wells Fargo, will report fourth-quarter results before the opening bell on Friday. We expect the strength of the third quarter to continue the last three months of last year. While these numbers will close the book in 2023, we'll be looking at initial forecasts for net interest income and expenses in 2024. Expect close attention to the spending guidance because management still has work to reduce annual operating costs. . At a higher level, we are interested in hearing management's view on the bank's exposure to the distressed office real estate sector and what they are doing to de-risk that part of the balance sheet. We would also appreciate any additional details on the increase in capital requirements, along with reassurance, as we had last time, that the bank is well positioned to hold more capital if necessary while continuing to return cash to shareholders at through dividends and share buybacks. We continue to believe it is a matter of "when, not if" regulators lift the asset limit imposed on Wells Fargo following past misdeeds. Investors, like us, will be watching for any movement on that front. Monday, January 8 Before the bell: Helen of Troy (HELE) After the bell: Accolade (ACCD), Jefferies Financial (JEF) Tuesday, January 9 Before the bell: Albertsons (ACI) After the bell: PriceSmart ( PSMT), WD-40 (WDFC) Wednesday, January 10 After the Bell: KB Home (KBH) Thursday, January 11 8:30 am ET: Consumer Price Index 8:30 am ET: Initial Jobless Claims Before the bell: Infosys (INFY) Friday, January 12 8:30 am ET: Producer Price Index Before the bell: Wells Fargo (WFC), JPMorgan (JPM), Bank of America (BAC), Bank of New York Mellon (BK), BlackRock (BLK), UnitedHealth (UNH), Delta Air Lines (DAL) (see here for a complete list of Jim Cramer's Charitable Trust shares). As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable fund's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTMENT CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, TOGETHER WITH OUR DISCLAIMER. NO FIDUCIARY OBLIGATION OR DUTY EXISTS OR IS CREATED BY VIRTUE OF THE RECEIPT OF ANY INFORMATION PROVIDED IN RELATION TO THE INVESTMENT CLUB. NO SPECIFIC RESULTS OR BENEFITS ARE GUARANTEED.
Traders work on the floor of the New York Stock Exchange (NYSE) on the first day since the Christmas holidays on December 26, 2023 in New York City.
Spencer Platt | Getty Images News | fake images
The first week of 2024 is officially in the books, and with it, the end of a nine-week winning streak on Wall Street.
