Stock Market This Week

Stock Market This Week – 02/03/24

Stock Market This Week

Stock Market This Week – 02/03/24

The January jobs report was on fire this past week, exceeding almost all predictions by economists. A total of 353,000 new jobs were created, and the unemployment rate fell to 3.7%. The data was interesting because, when combined with the GDP growth, low inflation, and the surging stock market, it paints a picture of an economy performing well.

Despite the promising numbers, some people still feel a recession is imminent. According to a recent poll, one in two economists expects a recession this year. Further, many hedge billionaires have been warning publicly about a recession recently, which makes one wonder if they know more than the rest of us. On the other hand, they may be invested in short-term Treasuries, which do comparatively better during recessions.

However, it needs to be clarified how an economy with sub-4% unemployment moves into a recession. Since the pandemic, it has survived 40-year high inflation, record oil and gas prices, the Russo-Ukrainian War, and conflict in the Middle East. 

As a result, I am personally staying in equities because I buy and hold. A recession will eventually happen, but the data does not currently show it.

Stock Rover is a good place for market data and news. It’s important to stay informed but use reputable sources. Otherwise, you may make poor investing decisions. Stock Rover’s market and investing news feed is a good place to start. It includes MarketWatch, Investopedia, WSJ, etc. Click here to try Stock Rover for free* (14-day free trial).

Stock Market Overview

Data from Stock Rover* revealed stock markets were generally positive for the week. The Dow Jones Industrial Average (DJIA), S&P 500 Index, and the Nasdaq Composite had gains. Mega-cap tech stocks and some cyclical sectors have done well. However, the Russell 2000 fell on weakness in regional banks after poor results and a dividend cut from New York Community Bancorp (NYCB). Many regional banks are small and mid-cap stocks.

Nine of the 11 sectors gained this week. The Consumer Cyclical, Communication Services, and Consumer Defensive sectors were top performers. However, the Technology, Real Estate, and Energy sectors were the worst performers.

Oil prices fell over 7% on news about the Middle East and a potential ceasefire after the Federal Reserve kept rates constant, ending at ~$72.41. The VIX rose to 13.85, which is still well below its long-term average. Gold climbed to ~$2,057 per ounce.


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Stock Market Returns This Week
Source: Stock Rover*

The markets continue to move upward due to the economy’s strength. The Nasdaq leads the way, followed by the S&P 500 and the DJIA. However, the Russell 2000 is still negative due to weakness in small-cap equities. Six of the 11 sectors have positive returns. The top performers in 2024 have been Communication Services, Technology, and Healthcare, while the Utilities, Basic Materials, and Real Estate sectors are trailing.

YTD Stock Market Returns
Source: Stock Rover*

The dividend growth investing strategy started the year down. Larger market capitalization stocks are performing better than smaller ones. The table below shows their performance by category. However, dividends and passive income streams continue to grow.

CategoryYTD Return (%)
Dividend Kings-0.3%
Dividend Aristocrats+0.4%
Dividend Champions-1.5%
Dividend Contenders-2.1%
Dividend Challengers-3.1%
Source: Stock Rover*

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Stock Market Valuation This Week

The S&P 500 Index trades at a price-to-earnings ratio of 26.91X, and the Schiller P/E Ratio is about 32.37X. These multiples are based on trailing twelve months (TTM) earnings.

The long-term means of these two ratios are approximately 16X and 17X, respectively. 


The market is still overvalued despite the recent correction, bear market, and rebound. Based on historical data, earnings multiples of more than 30X are overvalued.

Resources

Curated Weekend Reading From Around The Web

Portfolio Management and Investing

Retirement

Financial Independence


Here are my recommendations:

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  • Stock Rover is the leading investment research platform with all the fundamental metrics, screens, and analysis tools you need. Try it free for 14 days.
  • Portfolio Insight is the newest and most complete portfolio management tool with built-in stock screeners. Try it free for 14 days.


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Prakash Kolli is the founder of the Dividend Power site. He is a self-taught investor, analyst, and writer on dividend growth stocks and financial independence. His writings can be found on Seeking Alpha, InvestorPlace, Business Insider, Nasdaq, TalkMarkets, ValueWalk, The Money Show, Forbes, Yahoo Finance, and leading financial sites. In addition, he is part of the Portfolio Insight and Sure Dividend teams. He was recently in the top 1.0% and 100 (73 out of over 13,450) financial bloggers, as tracked by TipRanks (an independent analyst tracking site) for his articles on Seeking Alpha.

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