Black Swan Casts Shadow Over Wall Street:
Stocks were mixed last week as investors grappled with a flurry of market-shifting developments, including an unsettling AI update, news from the White House, and Q4 corporate earnings reports.
The S&P 500 Index fell 1.00% while the Nasdaq Composite Index slid 1.64%. Meanwhile, the Dow Jones Industrial Average rose, picking up 0.27%. The MSCI EAFE Index, which tracks developed overseas stock markets, added 0.75%.1,2

Source: Bloomberg Finance, L.P.
A Choppy End to January
The week started on a down note with news that a Chinese artificial intelligence (AI) startup had made a breakthrough, which put pressure on a wide range of tech stocks. The tech-heavy Nasdaq fell 3% for the day, but the Dow Industrials ended the trading session slightly higher.3
Stocks were under pressure again mid-week as investors waited on news from the Federal Reserve. The Fed voted to hold firm on short-term interest rates. Even though the decision was widely expected, markets were under pressure again after the Wednesday afternoon announcement.4
Stocks rallied Thursday but reversed course Friday afternoon as traders adopted a more “risk-averse” position going into the weekend. There was a bit of anxiety knowing that the new administration’s tariffs on Mexico and Canada were scheduled to take effect on Saturday.4
Interestingly, it was the Dow Industrial’s fourth-straight week outperforming both the S&P and the Nasdaq.5


Sources: U.S. Department of the Treasury, Board of Governors of the Federal Reserve System, Charles Schwab
Black Swan Event
It’s hard to overstate how much the markets were caught off guard by Monday’s news related to the success of a new AI startup based in China.6
What unsettled investors was the company’s claim that it developed a competitive AI model that performs as well as its Western counterparts at a fraction of the cost. As the week progressed, markets started to process the news and began to evaluate whether it was truly a “black swan” event or just another development in the fast-moving world of AI.6
This Week: Key Economic Data

Source: Bloomberg Finance L.P.
This Week: Companies Reporting Earnings

Source: EarningsWhispers
Author

Gary Aiken
Chief Investment Officer
Concord Asset Management
—
Footnotes and Sources
1The Wall Street Journal, January 31, 2024
2Investing.com, January 31, 2024
3CNBC.com, January 27, 2024
4The Wall Street Journal, January 29, 2024
5CNBC.com, January 30, 2024
6CNBC.com, January 30, 2024
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Concord Asset Management, or any non-investment related content, made reference to directly or indirectly in this article will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this article serves as the receipt of, or as a substitute for, personalized investment advice from Concord Asset Management. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing.
The companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of any specific securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. The forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice. The market indexes discussed are unmanaged and generally considered representative of their respective markets. Index performance is not indicative of the past performance of a particular investment. Indexes do not incur management fees, costs, and expenses. Individuals cannot directly invest in unmanaged indexes. The Dow Jones Industrial Average is an unmanaged index that is generally considered representative of large-capitalization companies on the U.S. stock market. Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of technology and growth companies. The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) and serves as a benchmark of the performance of major international equity markets, as represented by 21 major MSCI indexes from Europe, Australia, and Southeast Asia. The S&P 500 Composite Index is an unmanaged group of securities that are considered to be representative of the stock market in general. U.S. Treasury Notes are guaranteed by the federal government as to the timely payment of principal and interest. However, if you sell a Treasury Note prior to maturity, it may be worth more or less than the original price paid. Fixed income investments are subject to various risks, including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications, and other factors. International investments carry additional risks, which include differences in financial reporting standards, currency exchange rates, political risks unique to a specific country, foreign taxes and regulations, and the potential for illiquid markets. These factors may result in greater share price volatility. Please consult your financial professional for additional information.
Concord Asset Management is neither a law firm, nor a certified public accounting firm, and no portion of the content should be construed as legal or accounting advice. A copy of Concord Asset Management’ current written disclosure Brochure discussing our advisory services and fees is available upon request or at https://concordwealthpartners.com/. Please Note: If you are a Concord Asset Management or Concord Wealth Partners client, please remember to contact the firm in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing, evaluating, and/or revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. Concord Asset Management and Concord Wealth Partners shall continue to rely on the accuracy of information that you have provided. Please Note: If you are a Concord Asset Management or Concord Wealth Partners client, please advise us if you have not been receiving account statements (at least quarterly) from the account custodian.