Investors Gear Up for a Pivotal Week: Shaping the 2024 Landscape for Stocks and Crypto

The upcoming week holds a confluence of significant events that could shape the trajectory of various markets. Despite an uncertain start for stocks in 2024, the first full trading week of the new year is poised to establish a tone for the year ahead.

The pivotal question surrounding the taming of inflation takes center stage, influencing the Federal Reserve’s potential actions in 2024. Market dynamics may be swayed by the release of December’s consumer-price index on Thursday, followed by the month’s producer-price index on Friday.

Projections suggest a 0.2% rise in the CPI, with the core rate excluding food and energy expected to follow suit. While not a substantial increase, it could push the year-over-year headline figure to 3.3%, posing a challenge to recent progress on inflation.

In contrast, the year-over-year core rate might decelerate to 3.8% from 4%.

Beyond inflation, the week’s events will provide insights into the strength of the American consumer and the potential for a “soft landing” for the economy. The outcome of this data is critical to maintaining the “Goldilocks” backdrop that fueled the stock market‘s nine consecutive weekly gains, ending with the turn of the calendar.

Earnings season unofficially kicks off with reports from JPMorgan Chase & Co. and Delta Air Lines on Friday, followed by major Wall Street banks in the subsequent week. Analysts anticipate cautious outlooks for the year ahead, given the downward revisions in S&P 500 earnings growth estimates for Q4.

The Consumer Electronics Show (CES) in Las Vegas, beginning on Tuesday, is expected to spotlight artificial intelligence, mobility, and healthcare. The event, once focused on gadget unveilings, now represents the pervasive influence of technology in modern life, particularly with the emphasis on AI incorporation into new products.

Amidst these developments, the cryptocurrency space remains in focus. After a stellar performance in 2023, the Securities and Exchange Commission faces a decision on spot-bitcoin ETF applications by Wednesday. Approval is widely anticipated and could significantly impact the adoption of bitcoin as an investible asset, particularly among institutional and retirement assets.

This decision comes as bitcoin trades just above $47,000, displaying notable gains in the new year and a remarkable 180% increase over the past 12 months, though still below its all-time high in November 2021.

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