Watch the CPK Market Action Report: January 2024

In 2023, stocks defied higher interest rates, a regional banking crisis and wars in Ukraine and the Middle East to close higher for the year. Will the Santa Claus rally continue at the start of the New Year or will we see a reset to start the year.

Watch the Market Action Report now:

Market Action Report

January 2024



In 2023, stocks defied higher interest rates, a regional banking crisis and wars in Ukraine and the Middle East to close higher for the year. Will the Santa Claus rally continue at the start of the New Year or will we see a reset to start the year. 

That action starts now!


Stocks backed up their strong November performance with another great month of gains. The S&P 500 advanced 4.42% in December logging its longest weekly win streak since 2004. Meanwhile, the Dow Jones Industrials jumped 4.84% and Nasdaq Composite 5.5% pushing both to their largest yearly percentage gains since 2020. 


Year-end performance for the Dow was 13.7%, the S&P 500 24.23% and the Nasdaq Composite was an eye popping 43.42%. Now, before you start comparing your personal result with these, let’s take a minute to consider a few facts. 

At the index level, the S&P 500 simply made up for a 19.44% loss in 2022. However, if you didn’t own the cap-weighted index in 2023, you might be seeing something completely different in your statements. That’s because, absent the magnificent 7 which made up 62.2% of the S&P 500 gain this year, you would only be up 9.94% this year. This leaves a 10-12% hole for the average investor to still dig out of. Nasdaq investors are dealing with the same issue. Even with a strong 2023, many find themselves down 10% or more over the last two years as they try to recover from the 33.47% loss they incurred in 2022. 


Bond yields all fell again throughout the month. The 5yr settled in at 3.84% while the 10yr and 30yr closed at 3.86% and 4.01% respectively. 

As we start 2024 the path of least resistance for Treasuries is higher and yields lower, although the decline in yields won’t be the boost for stocks in 2024 as it was in 2023, because if it keeps going and we see the 10-year yield break through support at 3.75% and keep dropping towards 3.00%, investors will interpret that as an economic warning sign now that the Fed pivot has already occurred.


February WTI Crude fell sharply in the last couple trading days of December effectively erasing the entire “elevated Middle East tensions” rally and closed out at $71.37/barrel.

In the short term, oil will be responsive to uptick in geopolitical tensions in the Middle East, especially given Iranian-funded groups such as the Houthis are getting more aggressive attacking commercial ships and U.S. military in the region. But for that to be anything other than a short-term influence, we’d need to see the conflict broaden and the chances of more direct U.S. military involvement increase. For now, as multiple reports state, Iran is not looking to provoke the U.S. into a military conflict. Until that changes, these types of geopolitical rallies should be limited. The bigger issue for oil as we start 2024 remains the supply/demand balance and the outlook there is mixed at best.

After an initial sharp drop, January High Grade Copper spiked to a 5-month high before closing slightly lower at $3.88/oz. That leaves the technical path of least resistance higher for industrial varieties right now, despite recession risks simmering.

Much like Copper, Gold also rebounded nicely from an early month drop to close at $2,066/oz which is well within striking distance of the early December all-time high. The weaker dollar and rising geopolitical tensions have boosted commodities as of late. However, for a new sustainable commodity rally to begin we need reduced fears of a global economic slowdown and stronger commodity demand estimates.


The dollar declined throughout December as well, closing at $101.04. The dollar rallied on the last Thursday of the month, which was the first time in a week thanks to still-low jobless claims and some year-end positioning.

While Jobless claims rose more than expected to 218k, that’s still a very low number and while that won’t make the Fed less dovish, it’s hard to envision six rate cuts (which the market has priced in) with claims near 200k.

That idea combined with the fact that the dollar drop was overdone in the short term and a bounce was needed, contributed to the late month rally. However, that doesn’t change the reality that markets view the Fed as the most dovish major central bank. As we start 2024, until that position changes any rallies in the dollar should be sold and a test of support at 100 shouldn’t be a shock.


Weekly jobless claims popped in the final reading of 2023, rising to a multi-week high, but even at 218k claims remain, generally speaking, very low and they Bottom line, there are some anecdotal signs that the labor market is seeing some softening, but until we see Continuing Claims above 2 million and initial claims rising through 250k toward 300k, the labor market will be considered strong and with a strong labor market, the chances of a hard landing will remain generally low.


As I look towards a new year in the markets and consider the past few years, I can’t help but feel as though all of us in the markets are in a proverbial canoe and the investing public is violently leaning to one side of the canoe and then the other, causing it to nearly tip each time. Here’s what I mean.

Think back to December 2021. The S&P 500 had just hit an all-time high. The impact of the pandemic was still being felt but tech companies were surging and leading the market higher as the investing public was convinced we were in a new “hybrid” world that was here to say. Fueled by stimulus and forced savings, economic growth was strong, inflation was rising and markets admitted that the Fed needed to hike rates in 2022 but didn’t think it’d be that bad. Put simply, market sentiment was resoundingly bullish and while investors admitted there were some issues, they were minimized and the outlook on December 28th, 2021 was very, very positive.

Of course, that optimism was misguided. The Fed was much more aggressive on rate hikes, inflation exploded, growth slowed, and the S&P 500 dropped 19.4%. Put simply, consensus was universally bullish, and consensus was absolutely wrong.

Now, think back to December 2022. Investors were despondent. The S&P 500 was ending the worst year in over a decade, the Fed was massively hiking interest rates, inflation wasn’t breaking, recession fears were surging, and investors were convinced we were facing either 1) Stagflation or 2) An imminent recession.

Of course, that pessimism was unfounded as growth remained resilient, inflation was broken and the Fed dovishly pivoted. Put simply, the consensus was universally bearish, and consensus was absolutely wrong.

Now, in December 2023, the consensus is universally bullish, again. The consensus view is that the economic soft landing is all but assured. The Fed will cut six times next year but not because of slowing growth and instead because inflation is about to go into some sort of freefall.

Despite numerous geopolitical hot spots, none of them will get materially worse, U.S. politics won’t be a problem (it’s an election year) and despite a potentially slowing economy and margin compression, companies in the S&P 500 will grow earnings by nearly 10% this year. The 5,000 mark on the S&P 500 isn’t a matter of “if,” it’s a matter of “when.”

That all may come true and that might be exactly how 2024 works out. But I’ve been in this industry long enough to know that when everyone seems to be leaning on one side of the proverbial canoe, it pays to move to the middle.

In December 2021, I cautioned against this universally bullish outlook as too complacent. Last year, I cautioned against the very bearish outlook saying under the surface, positives were in place.

Those weren’t predictions. Rather, they were observations stemming from 20+ years of “new years” in the markets. The reality of a market in any given year hardly ever matches the consensus and it almost never matches the consensus when it’s this sure of the outcome.

I hope the consensus is right. I hope that in a year I’m writing to you and the S&P 500 is above 5,000 and it’s been a great year for your businesses. But this universally bullish expectation makes me think everyone is leaning towards one side of the canoe when in reality, we need to be in the middle because there are real, legitimate risks in the new year.

We can still have a growth slowdown and a recession (the Fed’s record on soft landings isn’t a good one). Earnings growth can falter as demand slows and margins compress. Geopolitics can provide real, negative surprises. Inflation can bounce back. None of these events would be shocks, although thankfully, they are not the most likely case.

Bottom line, I view part of my job as making sure you have someone giving you agenda-free analysis that pulls you back to the middle of the proverbial canoe, and as we start 2024 that’s what you can expect me to continue to do.


For the month of January, our models currently hold a 50% allocation in the money market due to the current economic environment and the overbought position of the market itself.

Our broad focus is on Domestic Equities and International Equities.  

Our focus in Domestic Equities is on Large Cap Growth, Large Cap Blend and Mid Cap Blend with an emphasis on Technology, Industrial, Consumer Cyclical, Financials & Energy. 

In International Equities, our focus is still on Europe Emerging, Latin America and Europe Developed.


As a reminder, my current allocation is not a recommendation. Regardless of what happens next, investors like you need to have a simple and yet solid financial plan that reduces RISKS, COSTS and TAXES while securing the necessary income you need to maintain your lifestyle throughout retirement.

If you don’t have a plan OR you’re not comfortable with the plan you have, call me today to get pointed in the right direction.

I’m Chad Kunc and that puts a wrap on the January 2024 Market Action Report. Thanks for joining me. It’s time for me to get back to the markets.

And that action starts, NOW!