The Week In Review: 12/30/24

“When people are intimidated about having their own opinions, oppression is at hand.”
– Jimmy Carter

Good Morning ,

We hope everyone had a safe and Happy Holiday!

The stock market limped through the Holiday shortened week but was able to log some minor gains. Volatility was profound, again. The equity market closed at 1:00 p.m. ET on Tuesday and remained closed on Wednesday for Christmas Day.

The so called "Santa Claus rally" period (i.e. the last five trading days of the year and the first two trading days of the new year) began on Tuesday and doesn't always lead to gains in the stock market, but usually features a positive skew. The S&P 500 did close 0.7% higher on the week, the Dow Jones Industrial Average settled 0.4% higher than the previous Friday, and the Nasdaq Composite was 0.8% higher last week.

Santa has been a bit of a Grinch thus far in the stock market, but we still have some trading left.

There wasn't a lot of market-moving news and volume was thin ahead of another abbreviated week. The equal-weighted S&P 500 also settled fractionally higher than the previous week.

Gains in some mega caps and chipmakers provided some support to the broader equity market. NVIDIA closed 1.7% higher, Tesla gained 2.5%, and Broadcom surged 9.5%.

Qualcomm was another winner from the semiconductor space after jurors found that the chip company didn't violate terms of its agreement covering Arm Holding's designs. Shares settled 2.9% higher than last Friday.

Eli Lilly was another story stock, closing 2.0% higher for the week, after the FDA approved Zepbound (tirzepatide) as the first and only prescription medicine for moderate-to-severe obstructive sleep apnea in adults with obesity.

The economic calendar was light, featuring a better-than-expected weekly jobless claims report. Weekly initial jobless claims for the week ending December 21 checked in at a lower than expected 219,000 (consensus 232,000) while continuing jobless claims for the week ending December 14 hit their highest (1.910 million) since November 13, 2021.

Adding to last week’s anxiety was inflation news…

Inflation stalled on its way to the Fed’s 2% target. Great progress was made in 2023 and the beginning of 2024, but disinflation slowed in the second half of the year.

The labor market showed signs of weakening. Hiring slowed during the year and unemployment surpassed 4%. Wage growth, however, exceeded inflation for the majority of the year creating real wage growth for workers.

The housing re-sale market had the lightest volume since 1995. Housing prices came down slightly after peaking in 2023, but housing affordability remains historically low.

All these factors will play into the Fed’s monetary policy decisions. Now that the Fed is cutting rates, the continued pace and reaction by the overall economy will be a core focus in the new year.

This week will also be shortened with markets closed on Wednesday to celebrate the new year. We anticipate trading volume to again be light again before getting back into the regular groove next week.

We will still receive several economic reports this week. Pending Home Sales will be released on Monday, Manufacturing PMI will be released on Thursday, and ISM Manufacturing will be released on Friday.

Have a safe and Happy New Year!!

Michael D. Hilger, CEP^®

Managing Director

Senior Vice President, Wealth Management

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