Tuesday's Scoop: Pause ☀️

Hey friend - keep the feedback coming! It’s earnings season. Make sure we share the scoops you’re hoping to see.

Here’s what you need to know today…

1. Home prices keep climbing.

2. Job openings are still abundant.

3. Economic optimism is spreading.

S&P 500: 4,924.97
1Mo: +4% | 1Yr: +21% | 5Yr: +82%

The market took a breather from its record rally today as investors waited for word from the tech giants and the Federal Reserve. Corporate profits have been solid, but layoffs are rising.

Home prices keep climbing, thanks to an ongoing housing shortage. The Federal Housing Finance Agency reported average home prices rose 0.3% in November, now up 6.8% from the year before. That’s the fastest annual growth in almost a year. The available homes on the market are only half what they were before the pandemic. High mortgage costs have discouraged sellers who want to maintain their low rates.

Job openings are abundant, but layoffs are creeping higher. The Labor Department’s Job Openings and Labor Turnover Survey revealed a 101,000 increase in unfilled positions to 9 million in December. That’s roughly 1.44 open roles for every unemployed American, down from 2:1 early last year but well above pre-pandemic levels. Employees and employers are both hesitant to make moves right now. The number of people quitting their jobs declined for the fourth straight month to the lowest level in three years while the layoff rate stayed the same. Job openings picked up notably in professional and business services, manufacturing, retail trade, healthcare, and social assistance.

Optimism has started to spread across the economy. The Conference Board’s consumer confidence index rose to the highest level in two years in December. Americans are less worried about a recession and rising living costs.

(These links only work for 24 hours while the story is live.)

View company rankings based on your votes▶️

Why do investors care so much about Microsoft and Google?

The performance of Big Tech companies is critical to overall sentiment in the stock market. The Big Six - Apple, Microsoft, Amazon, Alphabet (Google), Nvidia, and Meta (Facebook) are so enormous compared to every other company that the fluctuations of their value drive the changes in The Market as a whole.

The S&P 500 index is the primary way people track whether The Market is rising or falling. It's a number that follows the value of the biggest 500 public companies in the US. As with most indexes, the actual number isn't as significant as the direction it moves. It helps us understand whether America's biggest corporations are growing. Daily fluctuations are very normal.

The S&P 500 Index is weighted by the size of the companies. The Big Six tech companies are so huge that they alone account for over 27% of the total size of The Market. The other ~495 companies make up the additional 73%. So, the prices of those Big Tech companies significantly affect the perception of how the whole market is doing.