Mid-Morning Look

Friday, December 29, 2023

U.S. stocks are slipping after opening flattish on the final trading day of 2023, with major averages giving up recent gains as the S&P fails just below its all-time highs on light volumes. Chicago PMI for December fell to 46.9 vs. 51.0 expected and 55.8 prior, as final data point of 2023 shows economic softening in manufacturing. The upward market momentum has reached a 9^th straight week of advances for the S&P and Nasdaq, while Smallcaps take a breather after a ferocious December as the Russell 2000 rises almost 14% this month in a catch-up trade after underperforming large caps the first three quarters of the year. If the S&P 500 ends Friday above 4,796.56, it will mark just the ninth time since 1928 that the U.S. stock-market benchmark or its predecessor has posted a record close on the final trading day of the year, according to Dow Jones Market Data. That feat last happened in 2020, and prior in 2013, 1999, 1991, 1963, 1958, 1954 and 1928. Oil prices are on track for down quarter and year, while gold is down on day but up for the year. Asian markets close out the year much weaker than the US, as the Shanghai Composite was down 3.7% for 2023 amid economic growth concerns and worries about the heavily indebted property sector. Hong Kong’s stock market has fared even worse, with the Hang Seng down 13.8%. Bond markets will cease trading for the year at 2 p.m. Friday, while the stock market closes at 4:00; both will be closed on Monday for New Years.