Market Ups and Downs for the Week
This week has been a rollercoaster for the stock market, with the Dow Jones Industrial Average (DJI) opening the week at $39,989 and hitting a high Monday morning at $40,049. However, the DJI ended Thursday with a huge dip at $39,065.83, lower than the start of the month. We saw a similar dip with the S&P, opening the week at $5,305, but ending Thursday at $5,268. While a small dip may be concerning, there is still strong overall growth for the last several months. Since late November, the S&P 500 has moved from $4,559 to its end-of-day price Thursday at $5,268 (+$705), and the DJI has had huge movements from $35,390 to today’s end at $39,065 (+$3,675). Unless we see massive downturns over the next few weeks, we can look at the market as very healthy.
Nvidia (NVDA) Continues to Shine
The market’s love affair with Nvidia continues as NVDA closed Thursday at $1,037.99. Continuing a look at six-month trends, NVDA was priced at $477.76 on November 23, 2023, meaning it’s increased in price by 117.26% for a total of $560.23. Such massive improvements make NVDA very popular but put it in danger of becoming a meme stock. Nvidia is a software and hardware company best known for its graphic processing units (GPUs). As many technology companies have been doing lately, Nvidia has been making splashes in the media with their announcements that they are looking into expanding into the AI industry. NVDA’s IPO has been growing quite well over the last five years but has made its biggest improvements since its dip in October 2022 to $112. With the announcement of a 10-1 split, many hope to hold onto NVDA as a long-term healthy alternative to meme stocks GME or AMC.
JPMorgan CEO Jamie Dimon Predicts the Future, Expects Increased Rates
While many continue to celebrate a strong market (despite Thursday’s blip), JPMorgan CEO Jamie Dimon speculates that the worst has not yet passed. Dimon sat down with CNBC Thursday and stated “I think there is a little bit of lull in here… Do I think rates that rates can go up a little bit? Yes, I do… Could rates be stickier than people think? I think that the odds are higher than other people think.” Dimon, states that he’s simply “on the cautious side,” as he usually is cautious. Dimon seems to be more concerned that people are overestimating the recovery of the economy, as well as the possible speculation that inflation will eventually dip down this year. Unfortunately, for most, these speculative thoughts do not give clarity to the strength of the U.S. economy for 2024.
Mortgage Rates Drop
FreddieMac announced Thursday that mortgage rates dropped below seven percent for 30-year fixed mortgages to 6.94%. Mortgage rates hit a five-year peak in October 2023 at 7.79%, but steadily dropped through January until recent increases within the last 4 months. Those looking to purchase new homes within the coming months will look for better trends with mortgage rates, but unfortunately, the future is far from clear.
Why it All Matters
We are seeing positive signs in the stock market, but we lack a clear vision of interest rates for the future. For those looking to start their investments, it’s going to be impossible to properly time the market and find a smart entry point. Regarding interest rates, it can be difficult to know when to pull the trigger for a large purchase, but if you have the money saved for a decent down payment, making that home purchase now may be better than waiting. Will home prices go up? Down? Will interest rates decline? It’s impossible to say. Making a home purchase now could be a risk, but if rates stagnate and prices increase, waiting could hurt. The best bet is to buy now and refinance later if interest rates drop significantly. If you’re looking to be cautious with your money, avoid other large unnecessary purchases such as a new car or personal loans. That debt can be difficult to manage, and with rates as high as they are, those additional payments will make a huge dent in your budget.