Stock Market This Week

Stock Market This Week – 02/10/24

Stock Market This Week

Stock Market This Week – 02/10/24

The stock market continues to set records in 2024 on the strength of the U.S. economy. The bull market that started in October 2023 has continued in 2024. Next, the S&P 500 Index closed above 5,000 for the first time ever this past Friday. Further, the Nasdaq Composite continues to rise on the strength of the mega-cap tech stocks. Also, the Dow 30 is near its all-time high. However, small-cap stocks are underperforming.

Many people, expecting a stock market crash and recession, are likely looking at the numbers in disbelief. Even hedge fund billionaires were incorrect. But so far, the U.S. Federal Reserve has threaded the needle with inflation, removing a significant challenge for the American economy and stock market. The latest Consumer Price Index (CPI) revision showed core inflation was an annualized 3.3% rate in the last quarter. The good news about inflation probably created optimism for investors.

Moreover, even the struggles at the New York Community Bank (NYCB) did not slow the market except for regional banks. In fact, arguably, the dividend announcement by Meta Platforms (META) overshadowed NYCB’s dividend cut.

In any case, the philosophy that applies in sports holds in investing; one should reinforce success. I am staying the course, and I believe the stock market will do the same.

If a company like Meta Platforms, the parent of Facebook, starts paying a dividend, they are likely back in vogue. For many years, tech companies have emphasized stock repurchases over dividends. Is that changing? Make a watchlist and analyze tech dividend stocks. Click here to try Stock Rover for free* (14-day free trial).

Stock Market Overview

Data from Stock Rover* revealed stock markets had another good week. The Russell 2000, the Dow Jones Industrial Average (DJIA), the Nasdaq Composite, and the S&P 500 Index were positive. Mega-cap tech stocks and some cyclical sectors continue to perform well.

Six of the 11 sectors gained this week. The Technology, Consumer Cyclical, and Healthcare sectors were top performers. However, the Communication Services, Consumer Defensive, and Utility sectors were the worst performers.

Oil prices gained nearly 6% to ~$76.60. The VIX declined ~6.6% to 12.93, which is still well below its long-term average. Gold ended the week at ~$2,039 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 but is close to breaking even. Seven of the 11 sectors have positive returns. The top performers in 2024 have been Communication Services, Technology, and Healthcare, while the Basic Materials, Real Estate, and Utilities 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-1.0%
Dividend Aristocrats-0.1%
Dividend Champions-1.5%
Dividend Contenders-1.8%
Dividend Challengers-2.9%
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 27.28X, and the Schiller P/E Ratio is about 33.83X. These multiples are based on trailing twelve months (TTM) earnings.

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


Despite the recent correction, bear market, and rebound, the market is still overvalued. 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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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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