Market Pulse: January 30, 2024

Global stock markets finished January with mixed results, reflecting a month of cautious optimism and some profit-taking, giving back some of the gains posted mid-month.

Monthly Performance

US Market Performance: The Dow Jones Industrial Average closed the month up 0.3%, the S&P 500 slipped slightly by 0.1%, and the Nasdaq Composite retreated by 0.8%.

Global Markets: It is notable whilst US and EU markets make new highs, China and Emerging markets more generally continue to struggle.


Sector Leaders and Laggards

Communication Stocks Takes Centre Stage: The Communication Services sector emerged as the leader for the month, surging 4.4%, fuelled by strong earnings reports from major media companies.

Materials Struggle:** The Materials sector lagged the market, declining by nearly 5%. This decline could be most likely be attributed to concerns about slowing demand in the construction and manufacturing sectors.


Market Movers

Central Bank Focus: All eyes were on the Federal Open Market Committee (FOMC) meeting that began on January 30th. Investors awaited any hints about the future pace of interest rate hikes, but no major announcements were made on the post meeting communique.

Geopolitical Concerns: Ongoing tensions in the Middle East remain a source of underlying market anxiety, but much of the Gaza crisis has for now at least, been priced into energy markets.


Other Asset Classes

Bond Market Activity: Treasury yields witnessed some upward movement with the 10-year U.S. Treasury note inching closer to the 4% mark. This suggests investors are pricing in the possibility of future interest rate increases.

Currency Market Shifts: The U.S. Dollar saw a slight gain against major currencies, potentially reflecting a flight to safety due to lingering geopolitical uncertainties.

Commodities on Hold: Overall commodity prices remained largely unchanged. Crude oil prices continue to be influenced more heavily by future economic activity, than geopolitical tensions.

Precious Metals Performance: Gold prices experienced some volatility but closed the month near $1,800 per ounce. Silver prices also fluctuated but ended January slightly above $21 per ounce. At this point, precious metals look particularly good value.

Overall

The market will closely monitor the FOMC's policy decisions and any indications on future interest rate adjustments. Increasingly, they are pricing in ‘macro perfection’, - that is to say slowing inflation, yet a reacceleration in global growth led by manufacturing. Commodities look ready to rally, after a reset in crude prices, positioning and sentiment all appear to support a bottoming of the commodity complex more generally here.

General disclosure:This material is intended for information purposes only, and does not constitute investment advice, a recommendation or an offer or solicitation to purchase or sell any specific investment product, strategy, plan feature or other purpose in any jurisdiction, nor is it a commitment from Aria Capital Management or any of its related companies to participate in any of the transactions mentioned herein. This material may contain estimates and forward-looking statements, which may include forecasts and do not represent a guarantee of future performance. This information is not intended to be complete or exhaustive and no representations or warranties, either express or implied, are made regarding the accuracy or completeness of the information contained herein. The opinions expressed are subject to change without notice. Reliance upon information in this material is at the sole discretion of the reader. Investing involves risks. Past performance does not guarantee future results. References to future returns are not promises or even estimates of actual returns a client portfolio may achieve. Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation.

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