The futures traded up Monday after an incredible week across Wall Street that saw all the major indices make big moves higher. The Dow Jones industrials posted another record finish Friday to close at 37,305.16 as U.S. stocks finished their longest weekly winning streak since 2017.
Hopes for an end to the interest rate increases and the beginning of rate cuts next year were the fire that blasted the markets higher last week. While the Federal Reserve dot-plot indicated three rate cuts were in the plans for next year, Friday’s rally was stunted after New York Fed President John Williams said rate cut talk was “premature.”
Treasury yields were mixed on Friday as the shorter maturities saw some selling while the longer government debt closed somewhat higher on the day. The benchmark 10-year note has slipped back under the 4% level and closed at 3.92%, while the short two-year paper closed at 4.45%. The inversion, which has widened recently between the two, still indicates that a recession is possible in 2024.
Brent and West Texas Intermediate crude both finished modestly higher on Friday, breaking a seven-week losing streak after a solid rally Thursday got buyers of the black gold back in action. After rising over the past month, the drilling rig count dropped by two last week, and it’s a good bet that the count will continue to fall until prices stabilize more. Natural gas had a solid day on Friday, closing up 3.3% at $2.47.
The February gold contract closed Friday down 0.54% to cap off a week that saw the bullion hit the highest levels since July 2020. Analysts cited the recent surge higher along with the Fed Governor tapping the brakes on the rate cut hype for next year for the selling to end the week. Many feel that gold will continue to rally in 2024.
Bitcoin, which has been on fire for the last six weeks, closed Friday down almost 2% to $42,186.90. The cryptocurrency giant surged higher along with stocks for the highest weekly close since April 2022. Continued short covering has been cited as one of the biggest reasons for the massive move higher. (Here are the biggest celebrity cryptocurrency losers.)
Notable upgrades for Monday, December 17, 2023
Illumina Inc. (NASDAQ: ILMN) from Sector Perform to Sector Outperform at Scotiabank with a price target of $135.
Salesforce Inc. (NYSE: CRM | CRM Price Prediction) from Peer Perform to Outperform at Wolfe Research with a price target of $315.
Snap Inc. (NYSE: SNAP) from Neutral to Buy at Guggenheim, which set its price target at $23.
Sunnova Energy International Inc. (NYSE: NOVA) from Neutral to Buy at Goldman Sachs. The price target was $17.
Notable downgrades
Arm Holdings PLC (NASDAQ: ARM) from Buy to Hold at Deutsche Bank, with the price target raised from $60 to $70.
Palo Alto Networks Inc. (NASDAQ: PANW) from Outperform to Market Perform at Raymond James; no price target given.
SolarEdge Technologies Inc. (NASDAQ: SEDG) from Neutral to Sell at Goldman Sachs. The price target is $77.
UnitedHealth Group Inc. (NYSE: UNH) from Hold to Reduce at HSBC Securities, which lowered its from $550 to $480.
Other changes
AppLovin Corp. (NASDAQ: APP) initiated with a Buy rating and a price target of $53.20 at HSBC Securities.
General Electric Co. (NYSE: GE) resumed with an Outperform rating at RBC Capital Markets, which raised its $131 target to $150.
Micron Technology Inc. (NASDAQ: MU) reiterated as Outperform at TD Cowen and its $78 price target raised to $100.
Teva Pharmaceutical Industries Ltd. (NYSE: TEVA) initiated with a Buy rating and a $13 price target at HSBC Securities.
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