January 2024 Monthly Review

Jordi Visser

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January saw the Fed Pivot rally that began in late October persist, with the stock market rebounding after a brief dip in the first week of 2024. By month's end, the SPX had completed its 13th positive weekly advance vs. one negative week since October. The SPX closed the month up 1.59%, driven by megacap tech names like Nvidia, which surged by 24%. Narrow breadth continued with the Russell 2000 and equal weight SPX closing down for the month. In 2023, the narrative revolved around a narrow breadth rally led by tech, and as 2024 commenced, investors once again embraced similar themes for success in the new year. This triggered a strong rally in the momentum factor, with the Morgan Stanley US Momentum Index having its best month since April 2022. In the rates market, 10-year yields remained relatively stable. However, due to stronger-than-expected economic data, a notable shift in Fed rate cut expectations occurred, dropping from approximately 85% at the end of December to below 40% at the end of January. 

We believes that the macro factors in the market will be calmer this year, with the Fed unlikely to raise rates. Expectations include a range of economic and inflation factors, promising some fluctuations but presenting opportunities for discerning investors to distinguish between strong and weak companies. A substantial valuation gap persists in the market due to uncertainty in recent years about a potential recession. However, the prevailing consensus among most investors is leaning towards a soft or no landing for the economy. This shift is expected to significantly enhance the efficacy of idiosyncratic stock selection compared to the preceding three years. This trend, evident since June 2023, is expected to continue throughout 2024.

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Important disclosures: Disclosures: This content (the "Insights Page") is provided by Weiss Multi-Strategy Advisers LLC ("Weiss"). The views expressed on the Insights Page are for informational purposes only and are subject to change without notice. Information on the Insights Page has been developed internally and is based on market conditions as of the date of the original post on the Insights Page from sources believed to be reliable. Nothing on the Insights Page should be construed as investment, legal, tax, or other advice and should not be viewed as a recommendation to buy or sell any security or adopt any investment strategy. Past performance is no guarantee of future results. Please consult your own advisers regarding business, legal, tax, or other matters concerning investments. Weiss has no control over information at any external site hyperlinked on the Insights Page. Weiss makes no representation concerning and is not responsible for the quality, content, nature, or reliability of any hyperlinked site and has included hyperlinks only as a convenience. The inclusion of any external hyperlink does not imply any endorsement or ongoing monitoring by Weiss of any hyperlinked site. Investing in securities is speculative and involves substantial risk of loss.

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Important disclosures: Disclosures: This content (the "Insights Page") is provided by Weiss Multi-Strategy Advisers LLC ("Weiss"). The views expressed on the Insights Page are for informational purposes only and are subject to change without notice. Information on the Insights Page has been developed internally and is based on market conditions as of the date of the original post on the Insights Page from sources believed to be reliable. Nothing on the Insights Page should be construed as investment, legal, tax, or other advice and should not be viewed as a recommendation to buy or sell any security or adopt any investment strategy. Past performance is no guarantee of future results. Please consult your own advisers regarding business, legal, tax, or other matters concerning investments. Weiss has no control over information at any external site hyperlinked on the Insights Page. Weiss makes no representation concerning and is not responsible for the quality, content, nature, or reliability of any hyperlinked site and has included hyperlinks only as a convenience. The inclusion of any external hyperlink does not imply any endorsement or ongoing monitoring by Weiss of any hyperlinked site. Investing in securities is speculative and involves substantial risk of loss.

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