S&P 500 closes at an all-time high

The S&P 500 closed at an all-time high on Friday as investors returned to buying equities in force following a short-lived market stumble to start the new year.

The broad market index rose 1.23 per cent to settle at 4,839.81, surpassing both the prior record intraday and closing highs from January 2022. Meanwhile, the Dow Jones Industrial Average, which set its own record at the end of last year, added 395.19 points, or 1.05 per cent, to end at 37,863.80. The Nasdaq Composite advanced 1.70 per cent to 15,310.97. The smaller, more tech-focused Nasdaq-100 gained 1.95 per cent to also hit a record high.

All three major averages are now in positive territory for 2024, with the 30-stock Dow going green during Friday’s rally.

Following a 19 per cent loss in 2022, the S&P 500 roared back in 2023, posting a 24 per cent gain as the economy skirted a recession that many had expected and inflation came down to levels that allowed the Federal Reserve to pause its interest rate hikes. The benchmark came close to reaching a record following a forceful fourth-quarter rally, but ultimately fell short. The market rally paused a bit to start 2024 as investors took some profits in the Big Tech leaders like Apple.

But they returned to buying those tech leaders in recent days. Friday’s milestone confirms that the stock market is officially in a bull market that began in October 2022, and not just a bounce within a bear market. The S&P 500 is up more than 35 per cent since that low.

The tech sector gained 2.35 per cent on Friday and more than 4 per cent during the trading week, making it the S&P 500′s best-performing sector week to date. Consumer Staples and Utilities were the only US sectors that closed lower.

Fresh consumer data on Friday indicated that consumers are becoming more confident on the economy and inflation. The University of Michigan’s Survey of Consumers showed a 21.4 per cent year-over-year jump to reach its highest level since July 2021.

Insurance company Travelers rose 6.7 per cent after posting an earnings beat. Ally Financial surged over 10 per cent after reporting strong quarterly results and a sale of a business unit to Synchrony Financial.

In crypto news, Bitcoin and Ether experienced gains in sync with the stock market's rally, driven by positive consumer sentiment and slowing inflation. Despite this bounce, Bitcoin is still set to record a 4 per cent weekly loss and has fallen 10 per cent since the approval of Bitcoin ETFs on January 10th. Ether is also on track to finish the week with a 3 per cent loss, but these crypto movements did not significantly impact equities, as several related stocks remained relatively flat.

In commodity-related news, oil prices saw a slight decline on Friday but recorded a weekly gain due to heightened tensions in the Middle East. The West Texas Intermediate contract for February settled down 0.9 per cent, while the Brent contract for March settled down 0.68 per cent. U.S. crude achieved a one-week gain of 1 per cent, with investors closely monitoring the possibility of supply disruptions resulting from militant attacks in the Red Sea, while the global benchmark increased by 0.47 per cent for the week.

Turning to the Australian landscape, with Australian economic data still a week away, traders are turning to offshore indicators. Notable reports from the US, including Q4 GDP and core PCE deflator, will influence monetary policy decisions. Additionally, New Zealand's quarterly consumer price index is expected to show a 0.5 per cent increase, lowering annual inflation to 4.7 per cent, below the Reserve Bank's forecast.

Futures

The SPI futures are pointing to a 0.4 per cent rise.

Currency

One Australian dollar at 8.15am was buying 65.88 US cents.

Commodities

Gold added 0.37 per cent. Silver lost 0.42 per cent. Copper gained 1.11 per cent. Oil fell 0.90 per cent.

Figures around the globe

European markets closed mixed. London’s FTSE added 0.04 per cent, Frankfurt fell 0.07 per cent, and Paris closed 0.40 per cent lower.

Turning to Asian markets, Tokyo’s Nikkei added 1.40 per cent, Hong Kong’s Hang Seng fell 0.54 per cent and China’s Shanghai Composite closed 0.47 per cent lower.

On Friday, the Australian share market closed 1.02 per cent higher at 7,421.24.

Dividends payable

Eildon Capital Group (ASX:EDC)

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.

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