Nasdaq 100 Is Set for Best Year Since Dot-Com Era: Markets Wrap

(Bloomberg) — A banner year for stocks is drawing to a close, with gains in big tech leaving the market near all-time highs amid the artificial-intelligence exuberance and dovish Federal Reserve bets.

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With only two sessions left before the final closing bell of 2023, the Nasdaq 100 is poised for its best year since 1999 and the S&P 500 is just a few points away from its record. The gauge is roughly 1% below the average full-year gain predicted by analysts in a survey published last week, which forecast the index would end 2024 at 4,833.

“If the stock market can break through that record high in any significant way as we move through January, it’s going to be very bullish on a technical basis,” said Matt Maley at Miller Tabak + Co. “Whenever the market is rallying strongly at the beginning of a new year — when a lot of people are adjusting their investment-game plans — it tends exacerbate the rally.”

The S&P 500 edged higher Thursday. Treasuries lost a bit of steam, with the yield on 10-year bonds topping 3.8%. As traders ramp up expectations on rate cuts in 2024, the global bond market is marching toward its biggest two-month gain on record.

Read: Five Things to Look For in US Stocks in 2024 as S&P Nears Record

From Nvidia Corp. to Microsoft Corp., the seven-largest US tech stocks were responsible for 64% of the S&P 500’s rally this year through last week as the artificial-intelligence frenzy took off.

The Magnificent Seven — which also includes Amazon.com Inc., Apple Inc., Google parent Alphabet Inc., Meta Platforms Inc. and Tesla Inc. — are expected to post 22% earnings growth next year, twice the S&P 500’s advance, data compiled by Bloomberg Intelligence show. The key is how much of that is already baked into share prices, especially with expectations for a soft landing building.

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About a week ahead of the all-important US jobs report, traders were unfazed by data showing initial jobless claims rose to 218,000. Economists forecast a still-healthy 170,000 increase in December payrolls, consistent with resilient labor demand that has been key in powering the economy.

Elsewhere, oil retreated on signs the US stockpile keeps building amid thin holiday volumes. The yen climbed as Bank of Japan Governor Kazuo Ueda continued to prepare the ground for the nation’s first interest rate increase since 2007.

Some of the main moves in markets:

Stocks

• The S&P 500 rose 0.2% as of 9:51 a.m. New York time

• The Nasdaq 100 rose 0.1%

• The Dow Jones Industrial Average rose 0.1%

• The Stoxx Europe 600 was little changed

• The MSCI World index rose 0.3%

Currencies

• The Bloomberg Dollar Spot Index fell 0.2%

• The euro was little changed at $1.1097

• The British pound fell 0.3% to $1.2762

• The Japanese yen rose 0.7% to 140.84 per dollar

Cryptocurrencies

• Bitcoin fell 1.9% to $42,563.26

• Ether rose 0.4% to $2,370.22

Bonds

• The yield on 10-year Treasuries advanced four basis points to 3.83%

• Germany’s 10-year yield advanced five basis points to 1.95%

• Britain’s 10-year yield advanced seven basis points to 3.51%

Commodities

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Richard Henderson, Robert Brand, Jessica Menton, Elena Popina and Ishika Mookerjee.

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