Global Economic Daily - 12/31/2024
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Quote of the Day: The limits of the possible can only be defined by going beyond them into the impossible. – Arthur C. Clarke
Equities: Stocks moved lower Monday in one of the final trading sessions of 2024, as a banner year for investors appears to be ending on a sour note. The Dow Jones Industrial Average lose 418.48 points to close at 42,573.73. The S&P 500 fell 63.90 points to 5,906.94, and the Nasdaq 100 slid 275.94 points to 21,197.09. Trading was choppy throughout the day, and the Dow was down more than 700 points at session lows. There was no apparent news catalyst for Monday’s decline, and trading was expected to be light given the shortened week. The major averages are heading into the year-end shy of record levels, with the S&P 500 and Dow up about 24% and 13%, respectively, and on track for the best year since 2021. The Nasdaq has gained almost 30% in 2024 and is on pace for its longest quarterly winning streak since 2021. However, some worries have mounted that the market may be losing momentum, with what appears to be year-end profit-taking after the major averages notched losing sessions Friday. Trading in the bond market could also be contributing to the pullback in tech stocks. The 10-year Treasury yield traded above 4.6% last week, though it retreated Monday. Investors are hoping that stocks will find their footing again and trigger what’s known as a Santa Claus rally. The phenomenon refers to the market rising into the final five trading days of a calendar year and the first two in January. The S&P 500 has returned 1.3% on average during this period since 1950. Instead, the S&P 500 has now fallen more than 1% in each of the past two trading sessions. This is the first time that has happened twice in the last five business days of the year since at least 1952. The upcoming days are a light period for economic data, with the market closed Wednesday in observance of New Year’s Day. The Chicago purchasing managers index for December did miss expectations on Monday, coming in at 36.9. Economists surveyed by Dow Jones were expecting a reading of 42.2. TECHNICAL OUTLOOK – The Dow and S&P are now both below the 14, 21 day moving average.
Metals: Gold and silver prices are solidly down in midday U.S. trading Monday. A rally in the U.S. dollar index is a bearish daily “outside-market” element for the precious metals. Technical-based selling from the shorter-term futures traders is also featured today, amid a lack of fresh, bullish fundamental news recently. Look for a quieter trading day Tuesday, what with the New Year holiday coming on Wednesday when most markets worldwide are closed. The key outside markets today see the U.S. dollar index higher. Bloomberg reports “the dollar is headed for its best year in almost a decade as U.S. economic strength reins in expectations for the Federal Reserve’s rate-cutting cycle, and Trump’s threats of harsh tariffs underpin bullish bets on the currency.” Meantime, Nymex crude oil futures prices are firmer and trading around $71.25 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.553%. Technically, February gold futures bulls and bears are on a level overall near-term technical playing field amid recent choppy trading. Bulls’ next upside price objective is to produce a close above solid resistance at $2,700.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the November low of $2,565.00. March silver futures bears have the overall near-term technical advantage. A nine-week-old downtrend is in place on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $31.00. The next downside price objective for the bears is closing prices below solid support at the August low of $27.39. TECHNICAL OUTLOOK – Gold and sliver are both now below the 14, 21 day moving average.
DISCLAIMER: The Information and data contained herein was obtained from sources deemed reliable. The accuracy and completeness are not guaranteed
Futures and options trading involves substantial risk and is not suitable for all investors. Therefore, individuals should carefully consider their financial condition in deciding whether to trade. Option traders should be aware that the exercise of a long option will result in a futures position. The valuation of futures and options may fluctuate, and as a result, clients may lose more than their original investment. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.