Market Summary 16th Jan 2024
Today, stocks generally saw a decline, influenced by rising yields. The $iShares Russell 2000 ETF (IWM.US)$ and $ARK Innovation ETF (ARKK.US)$ both experienced drops of over 1%, while the $iShares 20+ Year Treasury Bond ETF (TLT.US)$, which tracks US Treasury bonds, fell by 1.76%. Bigger indexes like the $SPDR S&P 500 ETF (SPY.US)$ and $Dow Jones Industrial Average (.DJI.US)$ had smaller decreases. Despite some significant falls, many stocks are still correcting in 2024, showing that both price adjustments and time are key factors in market corrections. Notably, $ARK Innovation ETF (ARKK.US)$ has been down for five consecutive sessions.
A concerning change is that Nasdaq's Net Highs have shifted to Net Lows for the first time since mid-November. Such shifts can occur even during uptrends and might give misleading signals, especially as investor sentiment switches from FOMO to fear. The next few days will be crucial to determine if this is just a brief cooling-off period or the end of the strong market trends we saw at the end of 2023.
On a brighter note, some stocks are still showing strong performance. $Advanced Micro Devices (AMD.US)$, for instance, soared 8.31%, and $Palo Alto Networks (PANW.US)$ added another 2% gain. Additionally, the declines in less robust stocks have been relatively orderly. However, the shift to Net Lows calls for increased caution, particularly with newer and untested stocks. This makes it a time to be more careful about adding new names to investment portfolios.
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