After a blistering 2023 that saw the Nasdaq soar 44% and the S&P 500 up 24%, the new year selling continued on Thursday. The major indices closed mostly lower, with only the Dow Jones industrials scratching out a tiny gain. The song remains the same as investors looking to move significant 2023 gains to this year continue to sell shares. The selling, while not at a frantic pace with fourth-quarter earnings starting next week, economic data pouring in, and the Federal Reserve meeting yet again at the end of the month, clarity on rate cuts this year remains the top priority across Wall Street.
Bonds
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Treasury yields were modestly higher across the curve as, once again, some light selling came in on Wednesday. With the issues mentioned above in place and bond traders eyeing increasing geopolitical issues across the globe, the haven government debt could see buying, especially if the two proxy wars heat up. The 10-year note closed at 4%, while the two-year paper finished the day at 4.38%. The ongoing inversion could spell trouble later this year.
Commodities
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Brent and West Texas Intermediate crude finished mixed on Thursday, with Brent down 0.84% at $77.59 and WTI closing up 0.18% at $72.33. China demand, currency issues (U.S. dollar strength or weakness) and the potential for the hostilities to expand in the Middle East keep the volatility cauldron burning for the sector. Natural gas continued its 2024 hot streak, closing at $2.83, up 0.32%.
Gold rebounded Thursday after some start-of-the-year profit-taking. The February contract closed the session at $2,051.60, up 0.08%. Many analysts expect central banks worldwide to continue buying the bullion to protect their sovereign debt and currencies. Bitcoin, which has been on a wild run, closed just higher at $ 44,247.
Here are the top Wall Street upgrades and downgrades for January 5, 2024
Upgrades
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Elanco Animal Health Inc. (NYSE: ELAN) from Hold to Buy, and price target raised from $13 to $20, at Stifel.
Leidos Holdings Inc. (NYSE: LDOS) from Equal Weight to Overweight at Barclays. No price target was given.
Downgrades
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International Business Machines Corp. (NYSE: IBM) from Hold to Sell with a price target of $143 at Societe Generale. (Wall Street loves these five AI stocks.)
Medical Properties Trust Inc. (NYSE: MPW) from Overweight to Sector Weight at KeyBanc, with no price target given.
PayPal Holdings Inc. (NASDAQ: PYPL) from Buy to Neutral at BTIG. No price target was given.
Palantir Technologies Inc. (NYSE: PLTR) from Hold to Underperform and the $18 price target reduced to $13 at Jefferies.
Other Calls
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On Holding AG (NYSE: ONON) was added to the Conviction List and named a Top Pick for 2024 at Needham. No price target was given.
Snowflake Inc. (NYSE: SNOW) was initiated with an Outperform rating and a price target of $230 at RBC Capital Markets.
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