THE MARKETS

📈 Stocks snapped their weekly winning streak, marking a weak beginning to 2024.

💼Economic News

The US job market received two promising reports this week: a drop in jobless claims and an increase in payrolls.

Weekly US unemployment claims fell by 18,000 to a two-month low of 202,000. This sign indicates that the labor market may be cooling, but it remains fairly strong. 

Meanwhile, American payrolls increased by 216,000 in December, surpassing analyst expectations and underscoring signs of strength.

 👀 What to Be on the Lookout for This Week

Here are the main economic announcements to look out for:

• Monday: December Consumer Inflation Expectations

• Tuesday: November Balance of Trade

• Wednesday: Weekly 30-Year Mortgage Rate Update

• Thursday: Weekly Jobless Claims, December CPI

• Friday: December PPI

Additionally, here are the biggest earnings reports to keep an eye on:

• Monday: Jefferies Financial Group

• Tuesday: Albertsons, PriceSmart, Tilray

• Wednesday: No major companies report earnings

• Thursday: Taiwan Semiconductor Manufacturing Company

• Friday: Bank of America, BlackRock, BNY Mellon, Citigroup, Delta Air Lines, JPMorgan Chase, UnitedHealth, Wells Fargo

📰 In Other News

Movie Theaters Battle Franchise Fatigue. In recent years, movie theaters have faced unprecedented challenges, from navigating a once-in-a-lifetime pandemic to dealing with dual strikes from actors and writers. Now, in 2024, they’re facing a new adversary: franchise fatigue.  

Audiences are starting to grow tired of sequels, prequels, and spinoffs. DC and Marvel have experienced this firsthand with the underperformance of movies like Shazam! Fury of the Gods and The Marvels. And this challenge may well continue through the new year, as the 2024 release schedule is filled to the brim with familiar franchises, including new installments in series like Alien, A Quiet Place, Ghostbusters, Planet of the Apes, Transformers, Sonic the Hedgehog, and Saw. Only time will tell how audiences will respond. 

Streamers Struggle. On the other end of the media spectrum, streaming companies are navigating their own set of challenges.  

Major streamers like Disney+, Netflix, and Peacock have been under increasing pressure to reach profitability. As a result, many streamers have instituted measures like ad-supported tiers, bundling services together, or increasing the cost of a membership.  

However, these measures have had an unintended consequence: more viewers are cutting down on their subscriptions. Roughly 25% of users who subscribe to major streaming services have canceled at least three of them, a significant increase from 15% two years ago.  

Americans Slash Spending. It’s not just streaming companies struggling with consumer demand. Industries across the board are having difficulty keeping sales up as Americans pull back on their spending, a stark shift from the past few years of consumers spending freely despite rising prices.  

Reflecting these challenges, companies like FedEx, Target, and General Mills have revised their sales outlooks for the upcoming year. Sales growth for companies in the S&P 500 is expected to average just 2.7% in 2023, down from 11% in 2022. 

Twitter’s Valuation Cut. Fidelity marked down its valuation of Elon Musk’s social media company X (formerly Twitter) by a staggering 71.5% from its original share value.  

In October 2022, Elon Musk bought the company for $44 billion. Now, the valuation has plummeted to a fraction of its selling price. The primary reason for X’s declining valuation is the mass exodus of advertisers, drying up the platform’s main source of revenue.

Big Tech Reckons With Slipping Sales. X isn’t the only social media giant struggling to start the new year. Apple was hit with not one, but two analyst downgrades this week, thanks to middling sales of its latest iPhone 15.

The downgrades came from analysts at Barclays Plc and Piper Sandler & Co. In addition to the worse-than-expected iPhone sales, they cited China’s weakening economy and fears of a slowdown in Apple’s ads business due to regulatory scrutiny. Apple already entered the new year as the tech giant with the least number of bullish recommendations. Back-to-back rating cuts don’t help.

Meanwhile, the semiconductor company Qualcomm — which Apple has spent billions in an effort to replace as the chief provider of iPhone chips — announced a new chip to power AR headsets, positioning itself as a direct competitor to Apple’s Vision Pro product. As technology evolves and new players enter the space, the reigning kings of Big Tech may begin to find the crown a bit too heavy to hold.

YOUR ECONOMY

🤑 How To Reach Your 2024 Finance Goals

What’s a Financial Health Day?

The start of a brand new year is always the perfect time to reevaluate your financial goals and set new ones. Before the year begins in earnest, many financial experts recommend dedicating a day to your financial well-being — a financial health day.  

On this day, you can tackle a variety of tasks based on your specific goals. Here are a few common tasks you might consider:

• Review your bank statements from the past year to assess your spending habits, savings and investments, and debt levels. 

• Set financial goals for the year and break them down into quarterly, monthly, and weekly milestones.

• Attend to any short-term financial matters, such as canceling old subscriptions or closing dormant accounts.

Think of your financial health day as you would a sick day at work, but instead of focusing on your physical well-being, it’s a day dedicated to improving your financial health.

3 Tips To Get Ahead

During your financial health day, experts recommend these three tasks to jumpstart your financial goals for 2024:

1. Consolidate bills. Consider scheduling the due dates of recurring bills so that they are paid consistently each month; ideally shortly after payday. This approach minimizes the risk of missing payments and can provide a clearer picture of your available cash after bills. To simplify even further, experts suggest consolidating payments to a single card or account.    

2. Schedule a “shopping day.” It’s easy to lose track of spending when you’re constantly buying things as needed. To avoid this, set aside one day of the week as your “shopping day.” Instead of sporadic purchases throughout the week, keep a running list of all the items necessary, then make those purchases on your shopping day. This strategy prevents overspending and impulse buying, keeping expenses within budget. Additionally, consider installing an ad blocker to reduce temptations while shopping online, and compile receipts to help track expenses.

3. Give yourself spending flexibility. While monitoring your expenses, it’s common to scrutinize each non-essential purchase. Nevertheless, money experts suggest occasional leniency. The occasional Frappuccino won’t break your budget, and cutting yourself some slack can be beneficial for both your financial and mental health. 

Find Balance in Your Budget

In general, experts suggest shifting away from the usual short-lived New Year’s resolutions to simply spend less and save more.  

Instead, the goal is to cultivate specific, lasting habits that will stay with us through 2024 and beyond. According to the National Institute of Health, a new habit typically takes around 10 weeks to form. With this in mind, dedicating the next couple of months toward building new money habits may make them a way of life by the end of the year.

💼 Let's Talk Job Market

A Brief Recap

Inflation has been tough on plenty of markets in recent years, but it appears to have left at least one untouched: jobs. The labor market in the United States has remained robust despite a turbulent few years for the economy, and 2023 continued this trend with unemployment lingering below 4% for most of the year.  

That said, in the latter months of the year, the strength of the job market started to decline. In January 2023, there were roughly 10.8 million job opportunities. By October, this number had dropped to 8.7 million.  

Looking forward, experts project that 2024 will bring a much more competitive job market. This shift is mainly due to the expectation of fewer job openings, which will increase the level of competition for job seekers. Members of the Federal Open Market Committee foresee a gradual increase in unemployment over the next year, projecting an average unemployment rate of 4.1% by the end of 2024, compared to the 3.7% rate in November and December 2023. 

All that to say, if you’re considering a job change in 2024, it might be a good idea to start planning now to increase your chances of success.

Tips for Finding a Job

To start, the higher-level job you’re looking for might be much closer than you think. In fact, your new dream job could even be within the same company.  

Researchers at LinkedIn are expecting an increased focus on retention and internal mobility from US companies in 2024. In other words, most companies will be more interested in promoting employees, rather than hiring externally.  

So, if you’re eyeing a new job this year, your best bet might be to explore job openings within your current organization. You can do this by checking major job boards like Indeed or Glassdoor to see if any new positions are actively hiring. Alternatively, consider checking with your manager for new openings. Your company could be on the lookout for new talent within its ranks, without publicly posting the job.

If your current company doesn’t have any suitable positions open, then it’s time to broaden your search to other companies. In 2024, job experts predict that the following three industries will be the most active in hiring:

1. Healthcare

2. Government

3. Education

As of January 1, 2024, 22 states and 38 cities and counties have raised their minimum wage, according to the Economic Policy Institute. So, even for those who have actively searched for new positions in the past year, there’s a good chance relevant jobs may be paying more now than the last time you checked.

Increase Your Hireability

There’s one other important factor contributing to the increasingly competitive labor landscape: artificial intelligence (AI). 

AI burst on the scene in late 2022 when OpenAI officially released its popular generative AI chatbot, ChatGPT. Then, all through 2023, AI technology continued to advance rapidly, sparking concerns about its potential impact on employment.  

Fortunately, at this point, job experts don’t foresee a major AI-induced shift in the labor market. In other words, for now, your competition will probably still be coming from other job hunters, not robots. That said, AI can help you secure a competitive advantage. With the technology exploding in popularity, many employers are increasingly looking to hire individuals who are AI-savvy. If you’re entering the job hunt in 2024, consider building AI skills — and putting them in bold on your resume.

POCKET CHANGE

Several electric vehicles, including the Nissan Leaf, Tesla Cybertruck, Chevrolet Blazer EV, and others no longer qualify for the $7,500 federal tax credit. On the flipside, General Motors will still offer a $7,500 incentive to buyers of its disqualified EVs. 

Analysts expect the IPO market to regain momentum in 2024, citing falling yields, economic stabilization, and a dovish Federal Reserve as positive indicators for the IPO market. 

The Secure 2.0 Act was signed into law in 2023, making it easier to save for retirement. Some notable changes in retirement plans include higher contribution limits and new stipulations for student loan payments. 

Pinterest predicts a return of groovy weddings, jazz, and a revival of “grandpa fashion” as the latest trends for this year. The social media site claims that 80% of its predictions come true each year. 

2024 is gearing up to be yet another busy year for travel, according to Airbnb. Popular travel destinations include Asia, less-known European cities, and locations along the Atlantic Ocean.