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Market Tumbles as Investors Start 2024 on a Sour Note

Highlights

  • Stock market starts 2024 with a sell-off.

  • Long-term bond yields rise, hinting recession risk.

  • Analysts issue stock upgrades and downgrades.

As the new trading year commenced, the stock market encountered broad-based selling, with two of the major indices ending the session in the negative territory. The most significant drop was observed in the Nasdaq, which fell 1.6%, marking its poorest performance since October. This slump was exacerbated by a downgrade of tech giant Apple, which saw its shares plummet close to 4%, a reaction to projections of weak demand for its upcoming iPhone model that might spell trouble for its hardware segment.

Yield Spikes Signal Caution

Adding to the market’s unease, U.S. Treasury yields experienced a surge, especially in long-term bonds. The 10-year note yield rose by eight basis points, settling at 3.94%, while the two-year note finished at 4.32%. Despite a slight decrease in the yield inversion, historical patterns suggest this may foretell an impending recession, casting a shadow over future economic prospects.

Energy and Gold Prices Show Mixed Results

In the commodities market, crude oil benchmarks witnessed a mixed start to the year despite resumed maritime movements through the Red Sea. Both Brent and West Texas Intermediate experienced an initial upswing, with potential Chinese demand providing a silver lining. Conversely, gold failed to maintain early gains, finishing slightly down amid a stronger dollar and falling crude prices. Meanwhile, Bitcoin enjoyed a robust day, its price bolstered by the anticipation of a Bitcoin exchange-traded fund.

Financial market analysts have issued various stock ratings for the day, including upgrades and downgrades for several major companies. American Express and Citigroup received favorable revisions, while AstraZeneca and Blackstone faced downgrades. Additionally, Amazon and Apple were subject to resumed coverage with optimistic and neutral outlooks, respectively.

Wall Street Analysts Adjust Stock Forecasts

Stephens upgraded American Express from Underweight to Overweight, and Wolfe Research improved Citigroup’s rating from Peer Perform to Outperform. Jefferies shifted its view of GSK from Hold to Buy and elevated Moderna from Perform to Outperform. Conversely, AstraZeneca was downgraded by Jefferies, Blackstone by Goldman Sachs, and Occidental Petroleum by Mizuho. Amazon was resumed with a Buy rating by D.A. Davidson, while Apple received a Neutral rating. Lastly, new ratings were initiated for Li Auto and Nio by Goldman Sachs.

Disclaimer: The information provided in this article is for informational purposes only and should not be considered as financial, tax, or investment advice. It is always recommended to consult with a qualified financial advisor before making any investment decisions. The author and newslinker.co are not responsible for any actions taken based on the information provided in this article. Past performance is not indicative of future results. Investing involves risks, including the potential loss of principal. Always do your own due diligence before making any investment or financial decisions.
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