A trader works while a screen shows a news conference by Federal Reserve Board Chairman Jerome Powell following the Fed's interest rate announcement on the floor of the New York Stock Exchange (NYSE) in New York City, the United States, on December 13, 2023 is.
Brendan Mcdermid | Portal
U.S. stock futures traded near the flatline on Sunday evening after the three major averages posted gains for a seventh straight week. The Dow Jones Industrial Average posted a new intraday record and the Nasdaq 100 hit a new closing high.
Futures tied to the Dow industrials gained 34 points, or 0.1%. S&P 500 futures also gained 0.1%, while Nasdaq 100 futures gained just 0.02%.
The winning streak for the S&P 500 marked the longest streak of weekly gains since 2017. The broad market index is up 3.3% this month, while the Dow Jones and Nasdaq are up 3.8% and 4.1%, respectively.
Investor sentiment turned positive last week after the Federal Reserve indicated three short-term interest rate cuts are expected in 2024 amid cooling inflation.
“Slowing inflation, low growth expectations and intact growth momentum are a great combination from a market perspective. We have argued time and time again that this is as Goldilocks backdrop as it gets,” HSBC chief multi-asset strategist Max Kettner wrote in a Friday note.
However, Kettner pointed out that short-term growth and profit expectations in the US remain weak. The current winning streak appears to be similar to the 2017-2018 market rally, he added, when the broadly optimistic sentiment in January gave way to disappointment “due to the explosion in implied stock market volatility.”
“For the first time in the second half of the year, we are cautious given the positive momentum. It might be advisable to start 2024 more cautiously,” said Kettner.
Turning to the economy, investors will look to the December survey of business leaders and the housing market index results. The last full trading week of 2023 begins on Monday.