Traders
work
on
the
floor
at
the
New
York
Stock
Exchange
(NYSE)
in
New
York
City,
U.S.,
January
19,
2024.
Brendan
Mcdermid
|
Reuters
The
stock
market
keeps
scaling
new
heights
as
investors
focus
on
the
good
and
ignore
the
bad,
no
matter
how
bad
the
bad
parts
might
look
sometimes.
Prospects
for
a
slowing
economy,
geopolitical
unrest
and
turmoil
in
Washington
aren’t
scaring
market
participants
largely
because
none
of
those
threats
have
turned
into
much
in
reality.
What
instead
has
taken
center
stage
is
an
economy
performing
remarkably
well,
inflation
pulling
back
and
a
run
of
positive
developments
in
Big
Tech
that
has
outweighed
any
what-ifs
that
the
market
has
had
to
endure.
“If
investors
are
looking
for
a
reason
to
be
negative,
it’s
hard
to
find,”
said
Mitchell
Goldberg,
president
of
ClientFirst
Strategy,
a
financial
advisory
firm.
“The
24-hour
news
cycle
is
so
intense.
But
the
fact
is,
a
lot
of
it
is
noise
and
a
lot
of
it
has
nothing
to
do
with
economics
and
personal
finance.
There’s
so
much
information
overload
now.
But
to
break
it
down
and
put
perspective
on
things,
what’s
not
to
like
about
the
stats
that
are
coming
up?”
As
it
has
digested
the
various
headwinds
and
tail
winds,
the
market
is
pushing
toward
a
record
closing
high.
In
fact,
the
S&P
500
breached
its
intraday
peak
Friday,
continuing
the
momentum
built
through
the
end
of
2023.
Large
technology
players
have
led
the
charge.
Juniper
Networks,
Nvidia
and
Advanced
Micro
Devices
are
the
three
biggest
sector
gainers
this
year
on
the
S&P
500,
buoyed
in
part
by
enthusiasm
over
generative
artificial
intelligence
technology.
Solid
economy
provides
a
boost
At
the
same
time,
economic
data
outside
of
manufacturing
and
housing
has
been
mostly
solid,
particularly
where
it
concerns
the
seemingly
unbreakable
labor
market.
With
expectations
running
high
that
elevated
interest
rates
pose
a
threat
to
continued
hiring
growth,
initial
jobless
claims
last
week
hit
their
lowest
level
since
September
2022.
Along
with
commentary
from
multiple
Fed
officials,
the
tight
labor
market
has
taken
some
of
the
steam
of
out
the
market’s
anticipation
for
rate
cuts
this
year.
Where
the
market
a
week
ago
was
nearly
certain
the
Fed
would
start
cutting
in
March
and
keep
going
with
six
more
quarter
percentage
point
moves
this
year,
pricing
shifted
Friday.
Traders
in
the
fed
funds
futures
market
now
think
there’s
less
than
a
50%
chance
of
a
March
cut
and
now
see
a
greater
likelihood
of
five
reductions
this
year,
according
to
CME
Group
data.
But
markets
stayed
positive
even
with
the
dimmed
outlook
for
policy
easing.
“As
far
as
the
Fed
raising
rates,
this
has
been
borne
out
that
as
long
as
the
rate
hikes
don’t
cause
something
to
break”
the
market
is
fine,
Goldberg
said.
“I
don’t
really
see
anything
breaking.
There’s
no
subprime
debt
crisis,
I
don’t
see
a
mortgage
crisis.
…
There
have
been
a
lot
of
big,
bold
predictions,
and
one
by
one
they
don’t
happen,
or
they
just
push
them
out
to
the
next
year.”
Withstanding
rate
hikes
Indeed,
the
market
has
behaved
well
since
the
Fed
started
hiking
rates
—
11
times
worth
5.25
percentage
points
in
the
most
aggressive
cycle
going
back
to
the
early
1980s.
Since
the
first
increase
on
March
17,
2022,
the
S&P
500
has
gained
more
than
8%.
Since
the
last
hike
on
July
27,
2023,
the
large-cap
index
has
risen
more
than
5.5%.
Now
the
market
is
anticipating,
with
perhaps
a
little
less
fervor,
that
the
Fed
is
going
to
start
cutting.
Investors
are
“bullishly
skating
to
where
the
puck
is
going,”
meaning
a
lower
fed
funds
rate,
Bank
of
America
investment
strategist
Michael
Hartnett
said
in
a
client
note
Thursday.
Combining
a
tough
economy
with
a
more
accommodating
Fed
and
an
outperforming
tech
sector
is
adding
up
to
a
winning
formula.
“The
big
seven
names
[in
tech]
have
become
like
a
chimera.
They
appeal
to
two
very
different
economic
backdrops,”
said
Quincy
Krosby,
chief
global
strategist
at
LPL
Financial.
“One
is
we’re
out
of
fear
that
the
economy
is
slowing
dramatically.
The
other
is
they’re
specific
catalysts
for
AI
because
the
market
has
been
focused
on
the
business
development
with
mega-tech
and
business
innovation
for
generative
AI.
And
now
what
you’re
seeing
and
what
companies
are
reporting
is
the
monetization
of
that.”
Krosby
specifically
cited
standout
earnings
from
Taiwan
Semiconductor
as
a
bellwether
for
the
sector
and
the
promise
that
disruptive
technology
holds.
“That
is
something
that
the
market
has
been
waiting
for,”
she
said.
Then
there’s
the
economy.
With
the
labor
market
withstanding
inflationary
pressures
and
higher
rates,
that
opens
the
door
for
more
consumer
strength
this
year.
Consumer
sentiment
hit
its
most
optimistic
level
since
July
2021,
according
to
a
University
of
Michigan
survey
released
Friday.
“You’re
always
looking
for
your
first
signals
towards
for
a
recession.
They
come
right
out
of
the
labor
market.
What
you
see
is
that
the
underpinnings
of
the
economy
helps
maintain
consumer
spending,
which
is
70%
of
the
economy,”
Krosby
said.
“That’s
a
backdrop
that
the
market
appreciates.”
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