US stocks open lower to start four-day trading week

On Jan 16, 2024

US stocks retreated on Tuesday, with investors still focused on the path of interest rates as they braced for more big bank results after a lackluster start to earnings season.

Dow Jones Industrial Average (^DJI) dropped 0.4%, while S&P 500 (^GSPC) shed 0.5%. The tech-heavy Nasdaq (^IXIC) fell roughly 0.5%.

All three major indexes closed Friday with weekly wins, and investors are looking to quarterly results from the financial sector and upcoming retail data to keep the momentum going, after a bumpy start to 2024.

Goldman Sachs (GS) shared opened slightly higher after the bank reported a fourth quarter earnings jump of 51% year-over-year. Goldman Sachs said its full-year net income of $8.52 billion for 2023 was down 24% as dealmaking slowed across the industry.

Morgan Stanley (MS) shares dipped more than 3% despite a fourth quarter revenue beat. The bank’s profit was impacted by a one time charge of $535 million.

The New York Federal Reserve’s Empire State Manufacturing Survey released on Tuesday morning showed activity plunged to its lowest level since May 2020 this month.

Investors are counting down to Wednesday’s retail sales report, as they track each release that could influence the Federal Reserve’s data-driven policy thinking. Last week’s surprise cooling in US wholesale inflation nudged up hopes for an interest-rate cut in March.

Focus will likely turn to Fed Governor Chris Waller’s comments due later Tuesday for more clues after Atlanta Fed chief Raphael Bostic and a top IMF official warned it’s too early to declare victory on inflation.

In corporates, Tesla (TSLA) shares slipped after its CEO Elon Musk said that unless he has roughly 25% voting control at the EV maker, he’d prefer to build artificial intelligence and robotics products elsewhere.

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Tue, January 16, 2024 at 2:34 PM GMT

Stocks open lower to start shortened trading week

Stocks opened lower on Tuesday as more bank earnings rolled in.

Dow Jones Industrial Average (^DJI) declined 0.4%, while S&P 500 (^GSPC) slid 0.5%. The tech-heavy Nasdaq 100 (^NDX) led the declines, down roughly 0.2%.

Goldman Sachs (GS) shared wavered despite soaring profits in the fourth quarter. Morgan Stanley (MS) stock declined more than 3% after its fourth quarter profit was hit by a one time charge.

Shares of Tesla (TSLA) were down more than 2% on Tuesday after CEO Elon Musk said he wants about 25% of voting control over the electric vehicle giant.

“I am uncomfortable growing Tesla to be a leader in AI & robotics without having ~25% voting control,” Musk wrote on an X post on Monday.

The New York Federal Reserve’s Empire State Manufacturing Survey out Tuesday morning showed activity plunged to its lowest level since May 2020 this month.
Tue, January 16, 2024 at 1:51 PM GMT

Manufacturing activity plunges in New York

A holiday-shortened trading week is kicking off with some terrible news on the manufacturing sector in New York.

The New York Federal Reserve’s Empire State Manufacturing Survey out Tuesday morning showed activity plunged to its lowest level since May 2020 this month.

The index, which measures the difference between respondents reporting higher or lower activity levels, fell to -43.7 in January. Economists had been expecting a reading in the negative single digits after the gauge hit -10.5 in December.

“While the survey’s headline index has fluctuated in recent months, this outsized drop suggests January was a difficult month for New York manufacturers, with employment and hours worked also contracting,” said Richard Deitz, economic research advisor at the NY Fed.

While not typically a market moving report — and a sample from just one region of the country — this reading from the NY Fed will likely add to fears from some investors that headline economic data is overstating the strength of the US economy as 2024 gets underway.

Manufacturing activity plunged in New York in January. (Source: NY Fed)