Stocks are hoping to break a two-day losing streak as we head into the last two days of a holiday-shortened week. On Tuesday, both the S&P 500 and Nasdaq Composite dropped under 0.5%, with light volume expected to continue as we near Thursday. Economic data released on Tuesday showed Durable Goods orders up 1.4% month-over-month, slightly above expectations, while Core Durable Goods also exceeded expectations with a 0.5% month-over-month increase. The most recent Consumer Confidence reading came in slightly weaker than expected, highlighting perceptions that may be impacting the market rally.
Individual stocks in the news on Tuesday included Reddit, which gained 9% following its recent IPO, and GameStop, which is indicated to open lower by nearly 20% after earnings missed expectations. Krispy Kreme shares jumped 39% after announcing a partnership with McDonald’s, while International Paper stock was down over 5% on news of a major acquisition. Johnson and Johnson is in talks to acquire Shockwave Medical, sending shares higher by 10% on Tuesday. Merck’s shares are higher after winning approval for their new drug to treat pulmonary arterial hypertension.
The economic calendar is light on Wednesday, but important data is scheduled for release in the next two days, including the Personal Consumption Expenditures (PCE) Index on Friday. This data will be released while both futures and equity markets are closed, requiring investors to position themselves accordingly on Thursday or wait until Monday. The month and first quarter are set to wrap up this week, with stocks on track to close higher for the fifth month in a row. The S&P 500 is currently more than 20% higher than it was in October, while the Nasdaq Composite is up over 25% in that same period.
According to Seeking Alpha, the top performing stocks so far this year include Super Micro Computer, up 267%, Nvidia up 92%, and Constellation Energy Corporation up 60%. Meta Platforms and Decker’s Outdoor Corporation close out the top five performers. The worst performing stocks include MarketAxess Holdings, Charter Communications, Warner Bros. Discovery, Boeing, and Tesla, with shares down between 25-30%. Additionally, the Japanese Yen is trading at a 34-year low, prompting the central bank to consider intervention. President Xi of China met with business leaders, including Apple’s Tim Cook, to discuss collaboration opportunities.
As the week progresses towards the end of the quarter, investors should prepare for some potential choppy trading due to the combination of economic data releases, expiration of quarterly options, and light trading volume. It is important for investors to stick with their long-term objectives and investing plans during times of market uncertainty. The market rally, while ongoing, seems to lack the typical euphoria, potentially influenced by shifting perceptions of the economy despite strong fundamentals. The performance of individual stocks reflects the broader market trends, with some outperforming and others lagging behind.
