US Stocks Could Pause For Breather After Record Rally: Analyst Says ‘No Doubt’ That 2024 Shaping Up To ‘Best Year Since 1999’

After last week’s robust gains, sentiment appears to have shifted back to caution, with index futures indicating a slightly lower opening on Monday. Ahead of some key economic data scheduled for the latter part of the week, traders may lack the incentive to further propel stocks higher. However, the upward momentum, particularly in AI-leveraged stocks, could help cushion any potential market downturn. Global cues are negative, with both Asian and European stocks mostly retreating on Monday.

Last Week’s Market Performance:

U.S. stocks concluded the holiday-shortened week ending Feb. 23 on a positive note, buoyed by Nvidia Corp.’s NVDA stellar earnings, which reinforced hopes of continued strong corporate profit growth serving as an upside catalyst for the market.

The Dow Industrials and the S&P 500 Index closed the week at fresh record highs, while the Nasdaq Composite briefly surpassed the 16,000 mark for the first time since Nov. 19, 2021, on Thursday before retreating below that level. If the uptrend resumes, the tech-heavy index could test its all-time high of 16,057.44 reached on Nov. 19, 2021.

Small-cap stocks underperformed amid volatility triggered by earnings releases from these companies.

Reflecting on the week’s movements, fund manager Louis Navellier commented, “It’s been a strong week and a strong month. Following a good earnings season, it’s difficult to see, besides some profit-taking, what will push us off this positive trend.”

Navellier is optimistic about the market’s performance for the remainder of the year. “In the aftermath of stock markets making new highs in America, Europe, and Japan, I expect that the overall stock market will get more narrow and selective as we digest stunning gains,” the fund manager said.

“There is no doubt that 2024 is shaping up to be the best year since 1999, so we have a lot to look forward to due to easy year-over-year comparisons for the next two quarters, multiple Fed rate cuts commencing no later than June, and the optimism that occurs during a Presidential election year.”

Quincy Krosby, Chief Global Strategist at LPL Financial, said the market breadth still remains as question and he also noted that historically February and March could be difficult periods for markets, particularly during election years.

“With financial markets assiduously – and nervously – following data that could shift the probability towards earlier rate cuts, the inflation report from the PCE’s perspective  on Thursday morning is the main event, followed by a host of Fed commentary on Thursday afternoon and Friday,” he said.

Futures Today

Futures Performance On Monday ( as of 5:15 a.m. ET)

In premarket trading on Monday, the SPDR S&P 500 ETF Trust SPY edged down 0.04% to $507.67 and the Invesco QQQ ETF QQQ was up a marginal 0.02% to $436.86, according to Benzinga Pro data.

Upcoming Economic Data:

A slew of market-moving economic catalysts are lined up for the week. The most-watched one is the personal income and spending report for January, which comprises the Fed’s favorite inflation gauge – the annual rate of the core price consumption expenditure index. The report is due on Thursday.

Market participants may also look ahead to the preliminary fourth-quarter GDP report due on Wednesday, a few housing market reports, the durables goods orders report for January, and the weekly jobless claims data. Also on tap are a few private sector business activity readings, the Conference Board’s consumer confidence index for February, and a slew of Fed speeches.

On Monday, the Commerce Department is due to release its new home sales report for January at 10 a.m. ET. Economists, on average, expect new home sales to come in at a seasonally adjusted annual rate of 680,000 units in January, up from a 664,000-unit rate in December.

The Treasury will auction three- and six-week bills and two-year notes at 11:30 a.m. ET and five-year notes at 1 p.m. ET.

See Also: How to Trade Futures

Stocks In Focus:

• Berkshire Hathaway, Inc.‘s BRK BRK Class B shares rose over 4% in premarket trading after the company reported over the weekend 28% year-over-year in fourth-quarter operating earnings.
• Li Auto Inc. LI climbed about 8% following its quarterly results announcement.
• Domino’s Pizza, Inc. DPZ, Clear Channel Outdoor Holdings, Inc. CCO. Elanco Animal Health Incorporated ELAN and Fidelity National Information Services, Inc. FIS are among the notable companies due to release their quarterly results ahead of the market open.
• Notable names reporting after the close include ADTRAN Holdings, Inc. ADTN, The AES Corporation AES, CarGurus, Inc. CARG, ONEOK, Inc. OKE, Workday, Inc. WDAY, Unity Software Inc. U and Zoom Video Communications, Inc. ZM.

Commodities, Bonds, Other Global Equity Markets:

Crude oil futures slipped 0.50% to $76.11 in early European session on Monday after the commodity posted a loss of 3.41% in the week ended Jan. 23. The benchmark 10-year Treasury note edged down 0.022 percentage points at 4.238%.

Most major Asian markets retreated on Monday, led by the Hong Kong and Chinese markets, as investors in these markets took profit following the past week’s gains. However, the markets in Japan, Australia and Taiwan rose modestly, with the Nikkei 225 Average closing at a fresh record.

European stocks showed lackluster sentiment in early trading.

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