Stocks (^DJI, ^IXIC, ^GSPC) have gotten off on the wrong foot, trading lower in the first trading days of 2024 following 2023's rally highs.

John Hancock Investment Management Co-Chief Investment Strategist Emily Roland attributes this early market environment to the anticipation of interest rate cuts made by the Federal Reserve, calling it a "dry January."

"We'll want to see continued disinflation in the pipeline and then of course earnings — last year was unbelievable just to see that earnings didn't matter much, even the macroeconomic data wasn't all that helpful," Roland tells Yahoo Finance about data points to watch, including Friday's jobs report data.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Luke Carberry Mogan.

Video Transcript

- Emily, it is great to see you.

Listen it's been, kind of, a bumpy start to the year here, Emily do you think-- listen that's kind of expected after the rip we saw in Q4 or no maybe this is the start of something more serious.

EMILY ROLAND: Yeah, I think it's to be expected.

I mean the last couple of months of 2023 was just unbelievable the amount of multiple expansion that we saw, the exuberance that we saw at-- during this Fed pivot party.

So essentially starting in the November Fed meeting we started to see the more dovish turn from the Fed.

And that was confirmed in December with more cuts priced in or seen in the statement of economic projections for 2024 and markets just absolutely loved it.

We saw rates coming down, risk assets rally, huge multiple expansion.

I think there's some oversold conditions there that are likely to be digested coming into this year.

So it's almost like we had the pivot party, and now it's, kind of, the hangover to the pivot party.

Maybe we call it dry January.

So just kind of a slower start here to the year after so much overindulgence to end 2023.

Not that I can relate.

- Really none of us can relate to that.

Of course not.

Emily it's great to see you, by the way.

Happy new year to you.

EMILY ROLAND: You too.

- It's been a while.

EMILY ROLAND: Happy new year.

- So how long does this hangover last?

Does it last for all of dry January, so to speak.

And when do we get a better equilibrium in pricing and expectations?

EMILY ROLAND: Yeah I mean, there's a few catalysts here along the way.

Of course, tomorrow we've got the jobs report.

So we'll look for further confirmation that the Fed can start to look at least cutting rates into the latter part of this year.

We've got another CPI report, of course, coming out so we'll want to see continued disinflation in the pipeline.

And then course, earnings.

Last year was unbelievable just to see that earnings didn't matter much even the macroeconomic data wasn't all that helpful.

You look at the leading economic indicators, now negative for 17 months in a row.

Earnings were flat in 2023 for the S&P 500, yet stock prices, of course, were up about 26% on the year.

So fundamentals didn't matter quite as much.

And I think last year if it was sort of the year of multiple expansion, maybe this year is the year where earnings come back into focus, where we start to see other kind of more fundamental drivers.

Maybe it's looking at income, looking at dividends as playing a bigger role in portfolios rather than just what's going on with the Fed and rates.