S&P 500 Stalls After Significant Surge as Bond Prices Rise: Market Overview

Following a substantial market rally, one of the most notable in recent decades, US stocks displayed mixed movements. This comes after the release of lower-than-expected new-home sales figures, influencing market dynamics. The volatility index, known as the VIX, paused its decline, staying at levels similar to those before the pandemic.

Losses were led by sectors like energy, industrials, and finance, while retail stocks showed mixed responses as Cyber Monday sales began, with Amazon.com Inc. (AMZN) rising and Best Buy Co. (BBY) falling. Bond prices increased, and gold prices exceeded $2,000.

Contributing to the cautious market sentiment was the slow growth in profits of China’s industrial companies in October and comments from the European Central Bank President about softening job markets in Europe due to tighter monetary policies.

Looking ahead to 2024, market strategists hold a cautiously optimistic view on stocks. The preliminary average target for the S&P 500 is around 4,546, aligning with its recent closing levels. However, the most conservative estimate suggests a potential 3.5% decrease. Deutsche Bank Group AG strategists, led by Binky Chadha, predict the index could reach 5,100 by the end of 2024, a 12% increase from current levels, anticipating cooling inflation and improved corporate earnings. Recent market rallies, driven by expectations of an end to US rate hikes, have reduced short-term volatility to its lowest since November 2021.

Upcoming earnings reports from Crowdstrike Holdings Inc. (CRWD), Salesforce Inc. (CRM), and Dell Technologies Inc. (DELL) are expected to shed light on cybersecurity priorities and potentially slower sales growth in a tightening corporate spending environment.

In other market news, Tesla Inc. (TSLA) faces challenges in maintaining its top-10 position in the S&P 500. A majority of investors surveyed are steering clear of the electric vehicle sector, and a 30% decline in the iShares Global Clean Energy ETF this year suggests further downturns in 2024.

Corporate updates include skepticism around weight-loss drugs impacting Novo Nordisk A/S’s (NVO) stock, Elliott Investment Management’s renewed calls for changes at Crown Castle Inc. (CCI), Citigroup Inc.’s downgrade of Foot Locker Inc. (FL), and record Black Friday sales for Shopify Inc. (SHOP) merchants. Additionally, Alibaba Group Holding Ltd. (BABA) has closed its quantum computing lab, hinting at possible further cost-cutting measures.

Key Market Movements:

• The S&P 500, Nasdaq 100, and Dow Jones Industrial Average showed little change.
• European and global indexes experienced slight declines.
• Currency and bond markets saw minor fluctuations, with a slight increase in crude oil and gold prices.