With the start of January 2024 Stocks experienced an uptrend following the release of data indicating that the U.S. economy surpassed expectations with a faster growth rate in the fourth quarter, accompanied by a deceleration in inflation. Furthermore, early statistics indicating a strong annualized growth rate of 3.3% for the U.S. economy in the fourth quarter—beyond economists’ forecasts of 2%—brought Treasury’s higher. Additionally, the report showed that during the fourth quarter, inflation decreased from 2.6% in the third quarter to 1.7%. When it comes to fundamental analysis there are 5 important factors like the purchasing managers index, Non farm payroll, unemployment rate, Advance GDP and FED fund rate.

The purchasing managers index of this month even though it was below a reading of 50 which determines if the market is growing or not however it still had a higher forecast and actual reading than last month which tells us that the markets are up and is growing. To add on to this the unemployment rate had a forecast of 3.8% but the actual reading was 3.7% which Is lower and better for the economy. Also when Advance GDP update had come out it also showed more reasons for the market to go up this month as it had a forecast 2.05 and an actual reading of 3.3%. With one of the most important reasons to the market going in an upward trend is to do with  Non farm payroll which is the measure of the number of workers in the United States excluding farm workers and workers in a handful of other job classifications.

Last NFP reading was 101k and this month it had a forecast of 120K and an actual reading of 164K. This is extremely good for the market as it shows people that more and more people are getting jobs which leads to investors to have the confidence to drive stocks to higher prices. Finally with the most important fundamental economic analysis the Fed Fund rate, this is what really makes the market move in a specific direction, as if interest rates are high stocks tend to drop as less people are borrowing money and investing it which makes stocks fall. However if the interest are low or at 0 this can really spike the stock market and make investors more keen into buying stocks since there is no interest that needs to be paid. Based on the analysis I believe the interest will be maintained over the next few months and something will then happen to make them drastically drop, when this has happened in the pass in 2007 November the stock market had crashed and the FED had to make interest rates 0 to make investors buy stocks.