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The Last Shall Be First: A Promising Start to 2024


The trading day of 2024 kicked off with an unexpected twist – value stocks taking the lead while growth stocks, especially those in the tech sector, faltered. This shift in investor preferences from 2023 made its mark on the S&P 500 index, which saw a 0.6% dip to 4,742 on Tuesday.

However, things were looking up for large-cap value stocks. The iShares Russell 1,000 Value exchange-traded fund (IWD) managed to secure a 0.4% increase, reaching $165.83. On the other hand, the iShares Russell 1,000 Growth ETF experienced a 1.5% decline, landing at $298.67.

It’s worth noting that the Russell 1,000 Value ETF represents the value stocks within the Russell 1,000 index – comprising the top 1,000 stocks in the market – while the Russell 1,000 Growth ETF focuses on the index’s growth stocks. Typically, the Russell 1,000 index aligns with the S&P 500 index.

This rotation towards value stocks signifies a notable departure from 2023, during which the iShares Russell 1,000 Growth ETF boasted a remarkable return of 42.5%, while its value counterpart mustered only an 11.3% increase.

The transition is evident even when examining individual stocks. Moderna, previously one of the S&P 500’s biggest losers in 2023, managed to shine with a significant rise of 13.1% to $112.50. This surge was partially fueled by positive remarks from an Oppenheimer analyst, making Moderna the index’s top performer for the day. Another noteworthy winner on Tuesday was Pfizer, another underperformer in 2023, which enjoyed a gain of 3.3% at $29.73.

Today’s winners include consumer staples, utilities, and healthcare companies – all of which lagged behind in 2023. PepsiCo impressed with a 1.8% increase, soaring to $172.91. The Health-Care Select Sector SPDR ETF also climbed by 1.8%.

On the flip side, the S&P 500’s biggest losers on Tuesday were dominated by some of the index’s biggest winners in 2023, namely Apple, Intel, and Carnival. The Technology Select Sector SPDR experienced a sharp decline of 2.6%. Other notable stocks from 2023, such as, Uber, and Alphabet, were also in the red on Tuesday. Apple struggled significantly with a 3.6% fall to $185.64, largely due to pessimistic comments from a Barclays analyst.

Interestingly, stocks that had been displaying strong momentum recently faced a downward trend on Tuesday. Conversely, factors typically associated with value investing, such as high dividends, remained resilient.

It remains to be seen whether this trend will persist, but Tuesday’s developments brought some relief to beleaguered value investors.

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