Weekly Newsletter 01/10/25
Good afternoon and warm greetings to a chilly wherever you are.
The markets were closed yesterday in observance of President Carter’s National Day of Mourning.
The major stock indices are down today after a hot December payrolls report. Wednesday was a mixed performance with big tech leading the way lower. US equities on track to finish mostly lower for a second straight week.
The 10yr Treasury bond reached a 14-month high today, nearing 4.8%. This is a perplexing move for the real estate market as mortgage rates are most influenced by the 10yr. US mortgage rates rose for the fourth straight week with the average 30yr traditional mortgage back to 7%.
In addition, Fed official comments stating the progress on lowering inflation has stalled were not taken favorably by investors. The odds of a rate cut in the first half of 2025 were greatly reduced and nearly all agree there will be no rate cut when the Federal Open Market Committee meets January 29th.
Global money market funds had big inflows on tariff anxiety as foreign markets try to assess potential impact.
It was a record holiday season for online retail as US consumers spent $241B from November 1st to December 31st, up nearly 9% from last year. Half of the spending was driven by just three categories: electronics, apparel, and furniture/home goods.
We will find out how Q4 earnings for US corporations turned out as whole as reporting begins soon. Market investors are particularly interested in hearing what companies have to say about potential impact of a new administration. Tariffs not surprisingly the big area of concern/uncertainty, though Q3 calls already saw companies start to talk up supply chain diversification and other remedies, particularly when it comes to China. According to latest Earnings Insight report from FactSet, Street looking for S&P 500 earnings to increase +11.9% y/y in Q4, down from the +14.5% expected at the start of the quarter but still the best growth in three years. Financials (+39.5%), Communications Services (+20.7%), Tech (+14.0%), Consumer Discretionary (+12.8%) and Utilities (+12.4%) all expected to deliver outsized growth. Consumer Staples (-1.8%), Materials (-2.1%), Industrials (-3.8%) and Energy (-24.6%) the drags. Over the course of Q4, bottom-up consensus fell by 2.7% (to $61.88 from $63.60). This compares to five-year average decline of 3.4%. Looking ahead, Street currently expects +11.9% earnings growth in Q1 and +14.8% growth for all of 2025.
A housekeeping note, we have dedicated Raymond James assigned phone numbers for texting of business requests or any purpose.
My text #: 239-299-8200
Pasquale’s text #: 239-932-3389
The link below contains additional financial planning articles and resources.
https://www.raymondjames.com/evangelista/resources
“We must adjust to changing times and still hold to unchanging principles.”--Jimmy Carter
Thank you,
Kyle
KYLE CHRISTIANSON, CFP®
Financial Advisor
Raymond James & Associates, Inc.
1421 Pine Ridge Rd, Ste 300
Naples, FL 34109
Toll Free (800) 843-2025 | Direct (239) 513-6525 | Main (239) 513-6500 | Fax (239) 596-5474
Kyle.Christianson@RaymondJames.com
Any opinions are those of Kyle Christianson and not necessarily those of RJA or Raymond James. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. There is no assurance any of the trends mentioned will continue or forecasts will occur. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Investing involves risk and you may incur a profit or loss regardless of strategy selected. This is not a recommendation to purchase or sell the stocks of the companies mentioned. Leading Economic Indicators are selected economic statistics that have proven valuable as a group in estimating the direction and magnitude of economic change. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market. The Dow Jones Industrial Average (DJIA), commonly known as “The Dow” is an index representing 30 stocks of companies maintained and reviewed by the editors of the Wall Street Journal. The NASDAQ composite is an unmanaged index of securities traded on the NASDAQ system. Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investor's results will vary. Sector investments are companies engaged in business related to a specific sector. They are subject to fierce competition and their products and services may be subject to rapid obsolescence. There are additional risks associated with investing in an individual sector, including limited diversification. Investing in oil involves special risks, including the potential adverse effects of state and federal regulation and may not be suitable for all investors. Bond prices and yields are subject to change based upon market conditions and availability. Gold is subject to the special risks associated with investing in precious metals, including but not limited to: price may be subject to wide fluctuation; the market is relatively limited; the sources are concentrated in countries that have the potential for instability; and the market is unregulated.
