Mixed Stock Market Outlook After The Best Week of 2023

Mixed Stock Market Outlook After The Best Week of 2023

On Monday, the stock market outlook grappled for direction following its best week in 2023. While the main benchmarks commenced the day on a positive note, momentum waned, leading to a shift into negative territory around midday.

Last week saw the Dow Jones Industrial Average post a 5.10% weekly gain, trailing behind the S&P 500’s 5.90% rise and the Nasdaq Composite’s 6.60% advance.

Rising Treasury Yields Hold Back Big Moves

In early trading, the three key indexes aimed to build on last week’s success. However, gains were curbed by the increase in Treasury yields. The yield on the 2-year government note surged by 10.9 basis points to 4.94%, while the 10-year bond yield climbed by 9.8 basis points to 4.65%. (Note: A basis point equals 0.01%.)

By the closing bell, the Dow marked a 0.10% increase at 34,095. The S&P 500 showed a 0.20% gain at 4,365, and the Nasdaq was 0.30% higher at 13,518.

Stock Control: Tesla Slips While Li Auto Soars

In individual stock developments, Tesla (TSLA) experienced a 0.30% decline following reports that CEO Elon Musk disclosed plans to manufacture low-cost electric vehicles at the company’s Gigafactory in Germany. Separately, Musk’s AI startup, xAI, introduced its AI chatbot named Grok in early beta access.

In contrast, fellow electric vehicle manufacturer Li Auto (LI) surged by 8.40%. Simultaneously, China unveiled a new economic plan to boost growth, particularly in industries like electric cars and semiconductors.

WeWork’s Uncertain Mark Stock Future

Trading of WeWork (WE) stock remained suspended at the opening bell due to pending news. Throughout the trading session, WE stock did not change hands, and no official press release was issued.

Last week, WeWork shares plummeted nearly 66.00% amid reports that the company is preparing to file for Chapter 11 bankruptcy. This decline highlighted the challenges the flexible workspace provider faced.

Trending Stocks Edge Lower After Nasdaq’s Winning Streak

Looking ahead, stock futures for the Dow Jones Industrial Average, S&P 500, and Nasdaq 100 indicated a slight dip early on Tuesday. Investors are evaluating whether the recent Wall Street rally can be sustained.

The Nasdaq Composite achieved its seventh consecutive positive session, the first such streak since January, while both the S&P 500 and Dow marked their sixth straight positive sessions. These gains came after the Federal Reserve‘s decision to leave interest rates unchanged, leading to a decline in Treasury yields and an uptick in stocks.

Caution Advised Amid Uncertain Cheap Stocks Conditions

Despite recent optimism, investors are advised to proceed cautiously as the market’s footing remains uncertain. Lisa Shalett, Chief Investment Officer at Morgan Stanley, emphasizes the need for more than a Fed rate cut to establish a new bull market.

Economic developments on Tuesday include the release of a report on the US trade deficit. Additionally, investors await quarterly results from Disney, Wynn Resorts, and Occidental Petroleum later in the week.

Mixed Start for European Stocks

On the other side of the Atlantic, European stocks displayed a mixed opening on Tuesday. Major European bourses showed slight declines initially, with France’s CAC 40 down 0.10% and Germany’s DAX down 0.07%. In the UK, the FTSE 100 began 0.03% lower.

China’s Exports Drop, but Imports Surprise

China reported disappointing export figures for October, with a 6.40% drop in exports. In contrast, imports unexpectedly rose by 3.00% in US dollar terms during the same period, defying earlier stock market outlook of a 4.80% drop.