Will Markets Reach New Highs?

How much farther do US stock indexes need to climb to reach new highs?

The indexes I’m referring are the Dow Jones Industrial Average, the S&P 500, the Nasdaq Composite and the Russell 2000.

  • The Dow’s all-time high was 36,952.  The index closed last Friday at 36,245, leaving the index 1.95% from its all-time high.
  • The S&P 500’s all-time high was 4818.  The index closed last Friday at 4594, leaving the index 4.88% from its all-time high.
  • The Nasdaq Composite’s all-time high was 16,212.  The index closed last Friday at 14,305, leaving the index 13.33% from its all-time high.
  • The Russell 2000 Small Cap index all-time high was 2458.  The index closed last Friday at 1862, leaving it 32% from its all-time high.

We would need more than a weekly blog to discuss the possible reasons for the large divergence between the indexes.

Market Climb Continues

Stocks continued to melt higher last week as sectors not named technology led the charge.  For the week the Dow rose 2.42%, the S&P 500 .77% and the Russell 2000 small cap index jumping 3.05%.  Nasdaq was the laggard, moving higher by .38%.

Over the pond, foreign stocks are following the lead, rising .85% with Emerging markets up .47%.

Bond Yields Continue to slide

Market interest rates continued downward, with the 10-Year US Treasury ending the week with a yield of 4.209%.  The following Friday, 4.472%.

Mortgage rates should continue to see some relief.  A few weeks ago, the average rate on a 30-year fixed rate mortgage hit 8%.  This week we may see the number be in the high 6% range.

Last week the Personal Consumption Index (PCE) reported inflation continues to moderate.  The Fed however has made absolutely no indication they will be reducing rates anytime soon.

The markets however are pricing in at least a couple of rate hikes in the first half of 2024.  We’ve been down this road before, as many prognosticators back in 2022, suggested the Fed would cut in 2023. 

Will the Fed cut next year?  My hope, is yes, however only for the reason to normalize short-term rates and not for any other economic or market issue.

TAXES 2024

Our Key Financial Data for 2024 is now available.  Please click here to be directed to our website where you can review and print this valuable resource.  Included, you’ll find updates for 2024 for the following:

  • Tax brackets
  • Standard Deductions
  • Capital Gains
  • Retirement Plan contribution limits
  • Health Savings Account limits
  • Estate and Gift Tax limits
  • Medicare IRMMA limits
  • Much more!

If you would like to discuss your tax situation prior to your next review meeting, please let us know.

As we approach the holidays and the end of the year, I hope everyone can slow down, relax, and appreciate the good in your lives. 

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