S&P 500 Poised to Hit Record 5,000  

The S&P 500 surged to an all-time closing high (4,958.61), rising for a fourth straight week on strong tech earnings. The benchmark index gained 1.38% (+3.96% year-to-date), boosted by Meta Platforms (META), up 20.51% for the week after the company announced a $50 billion buyback, Nvidia (NVDA) up 8.40%, and Amazon.com (AMZN) up 7.98%. The Nasdaq Composite rose 1.12% to 15,628.95 points (+4.11% year-to-date).

Solid profits and blowout jobs report enhanced faith in the US economy, albeit minimizing the chance that the Federal Reserve will reduce interest rates soon. The surge concluded a volatile week with Powell’s speech downplaying hopes for a first rate cut in March and renewed apprehension about regional banking frailties. Concerns about the financial stability of US regional banks have reemerged with New York Community Bancorp (NYCB) disclosing significant stress in its commercial real estate portfolio. NYCB's stock plummeted by 42% over the week, dragging down other regional lenders such as Western Alliance Bancorp (WAL) and Valley National Bancorp (VLY).

Furthermore, it's also worth noting that small cap stocks continued to underperform the broad US equity market. The Russell 2000 was down 0.79% week-over-week, bringing its year-to-date performance to -3.17%.

By contrast with their US peers, European indices ticked slightly below the flatline. The MSCI EMU edged down 0.09% (up 1.80% YTD) while the FTSE 100 slid 0.26% (down 1.52% YTD).

In Asia, the major trends observed in 2023 are being confirmed in 2024. Japan’s Nikkei 225 index added 1.14% for the week (up 8.05% YTD) while the Shanghai Composite plunged 6.19% (down 8.23% YTD). A Hong Kong court ordered the liquidation of property titan Evergrande Group, adding to the woes of China's struggling real estate sector. The rush of foreigners out of China's declining equity markets and the global resurgence of the US dollar was putting renewed downward pressure on the yuan. Major state-owned banks had to intervene by selling dollars to support the national currency. Investors are pessimistic about China's growth potential, dismayed by the absence of a substantial rescue plan for the distressed property sector, and exhausted from several years of poor performance.

In South Korea, the KOSPI index surged by 5.52% week-over-week, boosted by a mix of government pledges to improve market appeal, and encouraging economic data including higher-than-expected exports and a less severe consumer price index. In India, the NIFTY 50 index gained 2.35% for the week. Investors were heartened by a somewhat restrained annual fiscal budget from the ruling BJP party, ahead of a general election this year.