Dow Jones, Nasdaq, S&P 500 weekly preview: Q4 earnings season is here
S&P 500 (SPX) lost 1.5% in the first trading week of 2024, this way ending the streak of nine consecutive weekly gains since late October. The rally ended near the 4800 with the bulls failing to post a new record high. Still, the SPX is just 2.1% away from its previous all-time high recorded on Jan. 3, 2022.
Dow Jones Industrial Average (DJI) lost 0.6% but it remains close to the record highs set in the final week of December. Finally, the Nasdaq Composite Index (IXIC) dropped as much as 3.3%, marking the biggest weekly fall since September.
Equity markets have started this year on a rocky note as investors opted to take profit following a massive rally in the last two months of 2023, and ahead of the Q4 earnings season that starts later this week.
“Equity markets are now showing overbought conditions, with sentiment moving into complacent territory,” analysts at JPMorgan wrote in a note.
For this weak, investors will be focused on the CPI print for December, which is due out on Thursday. Moreover, the PPI data is expected to be released on Friday.
“[These] prints may be market-moving as the bond market tries to determine the timing of the first rate cut among March, May, and June,” analysts at JPMorgan said in a note on Monday.
Q4 earnings season is set to start
According to FactSet, the S&P 500 is anticipated to experience a year-over-year earnings growth rate of 1.3% for the fourth quarter of 2023. If this estimate holds, it will mark the second consecutive quarter of positive YoY earnings growth for the index.
Analysts at FactSet also took note of a significant downward revision in the earnings growth rate, as the estimated growth rate on September 30 was notably higher at 8%.
The Q4 earnings season arrives as the
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