Weekend Update, December 30th, 2024

Index, Sector & Asset Performance

Even with a late-week selloff last Friday (S&P500, Nasdaq, and Russell 2000 all dropping over -1%), the S&P500 index closed the week up +0.7%.

While the Santa Claus Rally kicked off Christmas Eve, with the S&P 500 gaining +1.1%, the Dow up almost +1%, and the Nasdaq up 1.35% near an all-time high, his sleigh appears to have come up short. This morning, pre-open, S&P500 futures are down about 70 points or -1.2% as a widely anticipated “Santa Claus rally” has failed to materialize. Even so, the S&P 500 is on track for back-to-back annual gains over +20%. Investors, please note that in December 2016, “Trump 1.0”, as well as December 1995, “Soft Landing 1.0”, the S&P500 closed both Decembers market on close low for the last week of the year. The US stock markets are open a full day on NYE and closed Wednesday for New Year’s Day. Fixed income/bond markets close early tomorrow for the holiday.

Sector performance last week was broadly mixed, with 2024 laggard Health Care taking the top spot last week up +0.7%. Eli Lilly & Co. and UnitedHealth together make up over 20% of the healthcare index and were both up +2%, helping lift the sector. Consumer Staples fell the most, losing -0.8%. Index names that contributed to the return were Costco Wholesale (-1.5%), Walmart (-0.6%) and Philip Morris (-2.2%).

Year to date, Communication Services is the sector up the most, +35.0%, while only Materials, is negative for the year, it is down -0.7%. Former President Jimmy Carter died Sunday. He was 100 years old.

Boeing stock dropped more than -3% after a Jeju Air crash over the weekend. South Korea has ordered inspections of all 737-800, the model involved in the crash.

Economic Indicators and Earnings Commentary

Most global economic data continue to miss expectations and the “economic surprise index” continues to head lower on signs of eco0nomic weakening.

The US averted another government shutdown on the back of a short-term budget deal.

This morning the Chicago PMI was announced, and it fell to 36.9 in December from 40.2 in November, missing the 42.7 consensus, according to data from the Institute for Supply Management.

Global Market Trends/Commodities/Currencies

The price of a barrel of oil rose above $71 today and hit its highest level since Dec. 19. Natural gas jumped more than +15% early Monday, rising to near $4 per million British thermal units.

Bitcoin pulled back to $93k.

The US Dollar continued its second half of 2024 rally as the scramble for year-end dollars continues. While this is a normal seasonal pattern, the Dollar strength is a definite headwind to US equities in 2025 if it were to continue. This bears watching! The DXY Index currently sits at 108.

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Past performance is no guarantee of future results. Indexes are unmanaged and one cannot invest directly in an index. They do not reflect any fees, expenses or sales charges.