SPY Technical Analysis & Weekly Stock Market Update


Chart done on hourly timeframe. Market had a rough start to 2024 after the most valuable company in the world, Apple, received a stock downgrade to start off the year. Barclays unexpected move to downgrade the stock sent shares of Apple sharply lower and brought down major tech and indexes down with it. The downgrade was a rude-awakening to investors who have been riding the high of the bullish rally, and its timing to start off the year leaves many to question what kind of year markets will have. 

The uncertainty continued into Friday when the latest labor market report showed robust hiring in December, signaling a stronger than expected U.S. labor market. Not only did hiring grow, but wage growth also grew at a faster rate than expected. The combination of these two factors may impact The Fed’s decision to cut rates because inflation can quickly pick back up according to this economic development. Members of The Federal Reserve were clear in their Minutes report, stating that they’re willing to cut rates only if economic development suggests it’s safe to do so. Expectations of an interest rate cut in March fell from 73% to 62% following the report, reflecting a change in outlook amongst markets and analysts.

This week the focus shifts from the labor market to big bank earnings and inflation data. The country’s biggest banks, Bank of America, JP Morgan, Wells Fargo, and Citigroup, will report this week for the first time in 2024. Last year we saw multiple major bank failures that caused heightened uncertainty in the markets so investors will be watching these earnings closely. The Consumer Price Index (CPI) and Producer Price Index (PPI) are also set to give us an update on inflation later this week. These reports MUST come in line or better than expectations in order to satisfy markets and avoid a meltdown. Conditions are already uncertain to start off the year so bad inflation news could send markets much lower.