Stock Market Today: December 30th - January 3rd, 2025

Welcome to the trading week of December 30th!

Dow falls more than 300 points Friday but breaks 3-week losing streak: Live updates



Stocks declined on Friday, led by technology names, but major indexes still posted a positive holiday week.

The blue-chip Dow Jones Industrial Average shed 333.59 points, or 0.77%, to 42,992.21, falling for the first time in six sessions. The S&P 500 fell 1.11% to 5,970.84. The Nasdaq Composite slid 1.49% to 19,722.03, as Tesla dropped about 5% and Nvidia fell 2%.

Still, the Dow squeezed out a roughly 0.4% gain on the week, breaking a three-week losing streak. The S&P 500 advanced 0.7% this week after posting its best Christmas Eve performance since 1974 on Tuesday, according to Bespoke. The Nasdaq slightly outperformed with a nearly 0.8% gain this week.

A rise in Treasury yields this week may have pressured equities. The yield on the benchmark 10-year Treasury rose more than 4 basis points Friday to 4.627% after the rate hit its highest level since May in the previous session.

“I think what you’re seeing today is a lack of faith,” Alan Rechtschaffen, UBS Global Wealth senior portfolio manager, said on CNBC’s “Money Movers.” “I think there’s a lot of noise about tariffs, there’s a lot of concern about productivity.”

Some investors remain hopeful that stocks will rise into the new year, spurred by the so-called Santa Claus rally. This refers to the market’s tendency to rise in the final five trading days of the year and the first two in January. Since 1950, the S&P 500 has returned 1.3% on average during this period, outpacing the market’s average seven-day return of 0.3%, according to LPL Financial.

“The nation is experiencing a collective sigh of relief after navigating through a contentious election cycle and unusual market dynamics to end 2024 with strong year-to-date gains,” said Todd Ahlsten, chief investment officer at Parnassus Investments. “Looking ahead to 2025, the markets are expected to broaden and improve.”

In December, the Nasdaq is on pace for a 2.6% advance, lifted by a jump in Tesla and Alphabet shares, as well as by a rally in Apple that has brought the iPhone maker closer to a $4 trillion market cap. The S&P 500 is down 1% on the month. The Dow is on pace for its worst month since April, with a roughly 4.3% decline.

This past week saw the following moves in the S&P:


S&P Sectors End of Week:


Major Indices End of Week:



Major Futures Markets End of Week:


Economic Calendar for the Week Ahead:


What to Watch in the Week Ahead:
(N/A.)

 

Revisiting 12 Predictions From Our 2024 Outlook: What We Got Right, and Wrong


As we get ready to release our 2025 Outlook, I thought now would be a good time to revisit our 2024 Outlook. I recognize this is rare in our world, as it’s not often you see strategists revisit and reevaluate their calls. We don’t really think of ourselves as forecasters in the strict sense of the term, in that we’re not trying to predict economic variables, or even market moves. But we manage several multi-asset class portfolios and we’re always making choices within those portfolios, i.e. “predictions” as to the opportunity cost of overweighting or underweighting one asset class versus another. That’s another difference between a lot of the outlooks you see and the ones we put out — usually, the people writing these are not managing portfolios.

If you’ve followed us over the last two years, you know that we’ve had some strong views during that time, much of it in sharp contrast to the consensus. But our views are always translated to our portfolios, and it’s within that context that we evaluate what we got right and wrong. That’s how we try to keep ourselves honest during the process. (Of course, it’s reflected in portfolio performance too.)

One knock some critics have on us is that we’re “permabulls,” which Ryan pushed back on over a month ago. Of course, if you had to be a perma-anything, a permabull would be the way to go (though it may sell fewer newsletter subscriptions). As Ed Yardeni recently wrote (on the same topic of permabulls vs permabears), bear markets are infrequent and don’t last very long — that’s because they tend to be caused by recessions. Yardeni points out that since the end of World War II, eight of the 10 bear markets have coincided with recessions. That’s one reason why we spill a lot of ink (or keystrokes!) on discussing the economy, an area where our “prediction” for no recession in 2023 and 2024 was seen as quite bonkers at the time. It turned out to be the right call, but more importantly, we like to think we got it right for the right reasons. With that, here’s the verdict on 12 calls we made in our 2024 Outlook.

One: Upside from productivity growth means expansion will continue in 2024
Verdict: Correct

Real GDP growth will likely clock in between 2.5 – 3.0% in 2024, boosted by productivity growth that is running quite a bit higher than what we saw from 2005 – 2019.

Two: Our Proprietary LEI suggests expansion continues. Consumption strong amid real income growth.
Verdict: Correct

Our proprietary leading economic index (LEI) for the US never indicated a recession in 2023 or 2024. (We populate a similar measure for 30 countries, and wrap it up into 5 regions, and the world.) This was mostly on the back of consumption driven by strong income growth, and strong household balance sheets. Real income growth was also boosted by falling inflation and lower energy prices. Employee compensation rose 5.8% over the past year, while headline PCE inflation (personal consumption expenditures) was up 2.4%.

By the way, our US LEI remains in a fairly solid place as we move into 2025.



Three: Cyclical headwinds from fixed investment fading, especially amid easing rates.
Verdict: Mixed

We expected headwinds from the investment side of the economy to fade as interest rates eased in anticipation of Fed cuts, especially housing. We thought business sentiment would improve as rates pulled back and also expected continued growth in manufacturing construction and equipment spending on the back of fiscal programs like CHIPS and IRA. Housing was positive in Q1 but started to fade as mortgage rates stayed elevated. We didn’t get much of a boost in business sentiment (except post-election), but we did see manufacturing adding to GDP growth after the first quarter.

Four: Inflation continues to pullback
Verdict: Mostly Correct

Inflation measured by the Fed’s preferred metric, core PCE, was running at 3.2% year over year 12 months ago, and it’s at 2.8% now (core CPI pulled back from 4% to 3.3%). Strictly speaking, we were “right,” but in all honesty, we expected shelter disinflation to drive inflation even lower than its current pace (along with goods deflation, including vehicle prices). I’m taking away some points for that.

Five: Expect the Federal Reserve to cut interest rates 3-4 times in 2024
Verdict: Correct

We kind of nailed this. Technically, the Fed cut 3 times, but by a total of 1%-point. Note that markets were pricing in 6-7 rate cuts a year ago, and so calling for 3-4 cuts was not exactly “consensus”. We did expect inflation to pull back, allowing the Fed to cut, but we also expected economic growth to stay strong (thus avoiding recessionary cuts).

Six: Forward earnings continues to grow, along with profit margins
Verdict: Correct

Next 12-month earnings for the S&P 500 were at $242/share a year ago, and it’s currently around $272. Forward margins are also at record highs of around 13.5%.

Seven: Bull market should continue in 2024
Verdict: Correct

This was supported by all of what came above — a strong economy, rate cuts, and earnings growth — but also the fact that historically, election years do better. All of this ended up being right, and we positioned our portfolios close to maximum equity overweight across the year. Now we did expect low double-digit returns for the S&P 500 in 2024, but strong momentum over the first six months led us to up that to around 20% in our Mid-Year Outlook. We adapt! Yes, 2024 total returns are likely to be quite a bit higher than that, but I’m still giving us full points for this. As I pointed out at the top, at the end of the day, it’s the portfolio decision that counts, not just the “call.”

Eight: Mid and small caps favored on the back of more favorable valuations and easing rates
Verdict: Wrong

This one hurts. An above-trend economy, easing rates, growing earnings, and more attractive valuations is what led us to make this call and overweight mid and small caps in our portfolios, although it was only a moderately sized bet. One thing people say when small caps underperform is that the Russell 2000 index has a lot of negative earners. However, we use the S&P indices, which screen for positive earnings, so that’s not an excuse. In fact, year to date (through 12/26/24), the Russell 2000 index is up almost 14% on a total return basis, versus 10.7% for the S&P 600.

Another argument here is that it’s all about the Magnificent Seven stocks. But this would be bit of lazy analysis on my part. What’s interesting is that in 8 of 11 sectors, the market cap-weighted sector index outperformed the equal-weighted sector portfolio — industrials and utilities were the exception (the returns were close), along with real estate. So, this wasn’t just about Technology, or Tech-adjacent stocks. In almost every sector, returns favored the largest companies. This is something we’re thinking deeply about and will discuss in the future.



Nine: Financials and energy sectors favored
Verdict: Mixed

Financials ended up being the second-best performer amongst the sectors, but our energy call was off. Though full disclosure: we removed our energy overweight early in the year, and overweighted communication services and industrials (along with financials). We do reserve the right to change our minds.

Ten: Intermediate maturity bonds outperform short maturity as Fed cuts
Verdict: Wrong

We got this wrong, plain and simple. At the same time, we were heavily underweight fixed income, and Treasuries, in our portfolios. So, we weren’t too unhappy to maintain duration close to that of the Bloomberg Aggregate Bond Index, even though it would have literally paid better to be in cash (short maturity Treasuries). Having longer duration did help during the bout of volatility we had in August, when treasuries rallied. Also, we diversified our diversifiers, with exposure to gold and managed futures throughout the year. That more than overcame any drag from holding onto longer duration bonds (relative to Cash). But I’m still going to rate this “call” as something we got wrong.

Eleven: Credit likely to outperform Treasuries, but we prefer equity risk
Verdict: Correct

We got this right, and it was based on a strong economy with no recession in sight. Here are year-to-date returns for bond indices as of 12/26/24:

• Bloomberg US Aggregate Bond Index: 1.1%
• Bloomberg US Treasury Index: 0.4%
• Bloomberg US Corporate Index: 2.2%
• Bloomberg US Corporate High Yield Index: 8.1%

However, as I noted at the top, what matters is not the just call itself but portfolio construction. And from that perspective, credit’s strength versus Treasuries is irrelevant. We had better exposure to the driver of that credit component through equities. And that’s why I rate this is as correct.

Twelve: US over international equities, due to a stronger dollar amid stronger relative economic growth
Verdict: Correct

You may be saying “Duh! Of course, you should underweight International given the last decade of outperformance by US stocks.” But again, we’d rather be right for the right reasons. The US economy did outshine everyone else in 2024, as we expected (and gave us enough reason to overweight US stocks). But we also saw dollar strength (even prior to the election), which ended up being an additional headwind for international equities. The MSCI All-Cap World ex US index rose 13.1% in local currency terms (through 12/26/24) but was up just 5.5% in USD terms.

Here’s the final count:

• 7 Correct and 1 Mostly Correct
• 2 Mixed
• 2 Wrong

Once again, I want to stress that it’s not about the calls, but how they translate to the portfolios we manage. And from that perspective, the verdict is actually better than what I summarized above. We obviously did get some calls wrong, but that’s also where portfolio construction matters, along with risk management. An important point here is that we do have broadly diversified, risk-based benchmarks for all our portfolios. As my colleague Barry Gilbert wrote, selecting a benchmark is not a trivial affair. It serves as our effective starting point for portfolio construction, but it’s also the neutral point we’re comfortable sitting at when uncertainty is high and we don’t see opportunities to add differentiated value.

Are Continuing Claims a Concern?
Thu, Dec 26, 2024

With the holidays, today's economic data slate was light with only jobless claims on the calendar. For initial claims, this week's reading came in at 219K. That was down 1K from an unrevised reading of 220K the previous week and was a surprise decline versus the forecasted print of 223K. Seasonally adjusted weekly claims have been on the decline in the past few months, but that only returns to levels right in the middle of the past couple of years' range.



Before seasonal adjustment, initial claims totaled 274.7K. That's not much different from what has been observed in recent years for this time as it basically unchanged year over year, slightly above 2021 and 2022 levels, and slightly below pre-pandemic levels from 2018 and 2019. As shown in the second chart below, the end of the year has typically seen claims rise before peaking shortly into the new year. Given claims have largely followed standard seasonal patterns, there's still a couple of weeks to go in which claims will likely continue to rise until what can be expected to be the seasonal and annual high.



With initial claims simply following seasonal patterns and not rising or falling in any notable or concerning way, continuing claims are a bit different. After seasonal adjustment, continuing claims jumped to 1.91 million. In the grand scheme of things, that is still relatively low and ranks in the bottom quintile of the historical range. That being said, the most recent reading narrowly surpassed the highs from November marking the first reading above 1.9 million since November 2021.



In the charts below, we again show the chart of seasonally adjusted continuing claims in addition to its six-month rate of change, but with a red dot for each time when the level of claims came in at a 3+ year high. As shown, claims are at an interesting crossroads. On the one hand, similar instances of a multi-year high in continuing claims have only been observed in or immediately surrounding recessions. On the other hand, the current level of claims is much lower than other recessionary periods and other three-year highs in recent decades. Additionally, the uptick in claims over the past six months is the smallest of any of these prior instances of a three-year high in claims.





Day After Christmas – NASDAQ & Russell 2000 Up 72.2% Of Time



Santa Claus Rally starts today. The Santa Claus Rally was discovered and named by Yale Hirsch in 1972 and published in our 1973 Stock Trader’s Almanacas the last five trading days of the year and the first two trading days of the New Year. This short, sweet rally is usually good for about 1.3% on the S&P 500, but the real significance of the SCR is as an indicator.

It is our first seasonal indicator of the year ahead. Years when there was no Santa Claus Rally tended to precede bear markets or times when stocks hit significantly lower prices later in the year. As Yale’s famous line states (2025 Almanac page 118): “If Santa Claus Should Fail To Call, Bears May Come to Broad and Wall.”

NASDAQ and Russell 2000 have logged the greatest frequency and magnitude of gains on the day after Christmas. Since 1988, NASDAQ has advanced 72.2% of the time with an average move of +0.38%. R2K has also advanced 72.2% of the time with an average advance of +0.40%. DJIA and S&P 500 have slightly softer records, but bullish, nonetheless.

Two days after Christmas, the market is less bullish with NASDAQ down more often than up. Three days after Christmas R2K small caps take the lead advancing 63.9% of the time with an average gain of +0.49%.

Looking further out, from 1950-1985 last 5 trading days of the year S&P 500 up 34 of 36 years, average gain 1.24%. 1986-2023 up 21 of 38 (no change in 2006), average gain 0.44%.

Market Cap and Equal Weights By Sectors
Tue, Dec 24, 2024

Call it a Santa Claus rally, but breadth and price action have improved in the past few days following an extremely weak stint in breadth to start the month. At multiple points last week, we discussed the horrible breadth that kicked off this month which was evident through a record streak of declines in the equal weight S&P 500 (RSP). Of course, when looking at the market cap version of the index (SPY), declines were actually not too severe. As discussed in today's Morning Lineup, whereas equal weight indices have broken uptrends, market cap versions of the S&P 500 and Nasdaq, bolstered by stronger performance in mega caps, still have intact uptrends.

Taking a look at sectors, as shown in the table below, whereas the market cap S&P 500 (SPY) has gained over 85% in the past five years, the equal weight version (RSP) has underperformed by more than 30 percentage points with a smaller gain of 52.7%. There are six of eleven sectors that have similarly seen their market cap weighted versions outperform the equal weight with the largest gap being the Tech sector. The best performer for both market cap and equal weight ETFs is Tech, with the market cap weighted Tech sector (XLK) up 160% in the past five years compared to a still great but much smaller 93% gain in the equal weight sector ETF (RSPT). Conversely, Energy, Industrials, Materials, Real Estate, and Utilities have all seen equal weight outperformance. Of those groups, Industrials have the largest performance gap between the two methodologies with the market cap ETF (XLI) underperforming the equal weight ETF (RSPN) by almost 24 percentage points.



In the charts below we show the long-term performance of the S&P 500 and its sector ETFs on market cap weighted and equal weight methodologies. While there are various sized gaps in performance between market cap and equal weight sectors, we would highlight that there are some sectors with notable divergences when looking at the chart. Since early 2023, Communication Services has seen the market cap version (XLC) take off whereas the equal weight (RSPC) has yet to even surpass mid-2021 highs. Consumer Discretionary is a similar story with a big ramp higher in the market cap (XLY) version especially in the past few months. Consumer Staples is the other sector with one of the most significant divergences as the equal weight ETF (RSPS) has actually been seeing lower lows and lower highs whereas the market cap weighted ETF (XLP) is in an uptrend (albeit roll ling over again in the past few months).

 

Here are the percentage changes for the major indices for WTD, MTD, QTD & YTD in 2024-



S&P sectors for the past week-

 

Here are the current major indices pullback/correction levels from 52WK highs as of week ending 12.27.24-


Here is also the pullback/correction levels from current prices


Here are the current major indices rally levels from 52WK lows as of week ending 12.27.24-

 

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Here are the upcoming IPO's for this week-

 

Stock Market Analysis Video for December 27th, 2024
Video from AlphaTrends Brian Shannon


ShadowTrader Video Weekly 12/29/24
Video from ShadowTrader Peter Reznicek
(VIDEO NOT YET POSTED.)

 

StockBoarders! Come join us on our stock market competitions for this upcoming trading week ahead!-

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StonkForums Weekly Stock Picking Contest & SPX Sentiment Poll (12/30-1/3) <-- click there to cast your weekly market direction vote and stock picks for this coming week ahead!

Daily SPX Sentiment Poll for Monday (12/30) <-- click there to cast your daily market direction vote for this coming Monday ahead!

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It would be pretty sweet to see some of you join us and participate on these!

I hope you all have a fantastic weekend ahead!

 

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Here are the most anticipated Earnings Releases for this upcoming trading week ahead.

***Check mark next to the stock symbols denotes confirmed earnings release date & time***

Monday 12.30.24 Before Market Open:

Spoiler: CLICK HERE TO VIEW MONDAY'S AM EARNINGS TIMES & ESTIMATES!

(NONE.)

Monday 12.30.24 After Market Close:

Spoiler: CLICK HERE TO VIEW MONDAY'S PM EARNINGS TIMES & ESTIMATES!

(T.B.A.)

Tuesday 12.31.24 Before Market Open:

Spoiler: CLICK HERE TO VIEW TUESDAY'S AM EARNINGS TIMES & ESTIMATES!

(T.B.A.)

Tuesday 12.31.24 After Market Close:

Spoiler: CLICK HERE TO VIEW TUESDAY'S PM EARNINGS TIMES & ESTIMATES!

(T.B.A.)

Wednesday 1.1.25 Before Market Open:

Spoiler: CLICK HERE TO VIEW WEDNESDAY'S AM EARNINGS TIMES & ESTIMATES!

(NONE. U.S. MARKETS CLOSED IN OBSERVANCE OF NEW YEAR'S DAY.)

Wednesday 1.1.25 After Market Close:

Spoiler: CLICK HERE TO VIEW WEDNESDAY'S PM EARNINGS TIMES & ESTIMATES!

(NONE. U.S. MARKETS CLOSED IN OBSERVANCE OF NEW YEAR'S DAY.)

Thursday 1.2.25 Before Market Open:

Spoiler: CLICK HERE TO VIEW THURSDAY'S AM EARNINGS TIMES & ESTIMATES!

(T.B.A.)

Thursday 1.2.25 After Market Close:

Spoiler: CLICK HERE TO VIEW THURSDAY'S PM EARNINGS TIMES & ESTIMATES!

(T.B.A.)

Friday 1.3.25 Before Market Open:

Spoiler: CLICK HERE TO VIEW FRIDAY'S AM EARNINGS TIMES & ESTIMATES!

(T.B.A.)

Friday 1.3.25 After Market Close:

Spoiler: CLICK HERE TO VIEW FRIDAY'S PM EARNINGS TIMES & ESTIMATES!

(NONE.)

 

And finally here is the most anticipated earnings calendar for this upcoming trading week ahead-
($RGP $LFCR)


If you guys want to view the full earnings post please see this thread here-

• Most Anticipated Earnings Releases for the week beginning December 30th, 2024 <-- click there to view!

 

Top of the morning StockBoarders! Happy Monday to all of you and welcome to the new trading week and a frrrrrrrrrrrresh start. Here is a quick check on those futures as we are under an hour into the US cash market open.

GLTA on this Monday, December the 30th, 2024!

 

Here are today's economic calendar events:

 

Here are today's analyst stock upgrades & downgrades:

 

Here are this morning's pre-market earnings results:

 

Morning Lineup - 12/30/24 - Rolling Over into Year End
Mon, Dec 30, 2024

Former President Jimmy Carter didn’t leave office as the most popular President, but his years after serving in the Oval Office helped to improve his legacy as one of the most admired men in modern American history. Since 1946, Gallup has run an annual survey asking Americans “What man that you have heard or read about, living today in any part of the world, do you admire most? And who is your second choice?” In the survey's history, Billy Graham tops the list with 61 of the top 10 finishes. Ronald Reagan ranks a distant second with 31 top-ten finishes, but right behind him, Jimmy Carter ranks third with 29, slightly ahead of Pope John Paul II (27) and Bill Clinton (26). Living to just over 100, the 39th President lived a full life.

US futures were trading just modestly lower until shortly before 8 AM Eastern but have weakened considerably since then on little news. Overnight in Asia, Japan and Korea both ended their trading years on a negative note with Japan’s Nikkei down 1% and the Kospi down a more modest 0.2%. In terms of economic data, Japan’s Manufacturing PMI came in below 50 for the sixth straight month. Trading in Europe had been much more subdued than in Asia, but these indices have also seen a pickup in the selling as US futures rolled over. Here in the US, both today and tomorrow will be full trading sessions, and markets will be closed on Wednesday for New Year’s Day.

Getting back to the US, this morning’s weakness will put the S&P 500’s 50-day moving average back into play after it held that level on Friday. As shown in the chart below, the technical picture isn’t looking particularly positive as we close out the year. The index has been gradually trending lower since its peak on 12/6. What a difference a few weeks make.

 

Here is a final look at today's market and futures maps, as well as how each sector performed individually at the close on Monday, December 30th, 2024.

 

Top of the morning StockBoarders! Happy Tuesday to all of you and welcome to the final trading day of the year and a frrrrrrrrrrrresh start. Here is a quick check on those futures as we are under an hour into the US cash market open.

GLTA on this Tuesday, December the 31st, 2024!

 

Here are today's economic calendar events: