Closing Recap

Tuesday, December 31, 2024

US equity futures rebounded a bit last night and looked ready to end the year on a positive note after posting two 1%+ down days in the last five days of the trading year for the first time since at least 1952. That said, the S&P is up 24% ytd despite a 2% fall this month, following a 24% gain last year, and on track for the best back-to-back percentage gains since 1998. Yesterday saw 471 stocks decline in the S&P 500 and all eleven S&P sector ETF’s finish in the red. Today is sure to be a low-volume day with no impactful economic releases, so maybe we can hold in positive territory for an early Happy New Year. Early action was positive, with breadth favoring advancers by almost 7:2 as small caps outperformed with IWM (+1.08%) versus SPY (+0.36%) and QQQ (+0.23%). Sector performance was also strong early as Energy (+1.22%), Real Estate (+0.86%) and Consumer Discretionary (+0.70%) were outperformers among S&P sector ETFs, while Utilities (+0.26%), Consumer Staples (+0.23%) and Technology (+0.19%) paced the underperformers though all 11 sectors gained. Unfortunately, profit takers won the day and the major indices couldn’t hold their gains.

In other data of note today, per @RyanDetrick, if we end in the red today for the S&P 500 it would mark a four-day losing streak to end the year and would be the longest since a five-day streak in 1966. That said, the average move on the last trading day of the year over the past twenty years has been -0.08% with only 30% positive, so nothing to get investors too excited, but the first trading day of the new year has averaged +0.38% and been positive 55% of the time, so that’s the good news. Separately, @bespokeinvest noted only 19% of S&P stocks are above their 50dma, though the index itself is just barely below its 50dma. Of course, with the Magnificent Seven contributing 57% of the S&P 500’s gains this year, versus 65% last year, that 50dma stat makes a bit more sense.

Heading into the final hour of trading for the year, after a late-morning roll to red, US equities never really found their footing and continued lower to test support pivots. Breadth rolled to almost 3:2 in favor of decliners, while small caps held flattish. Sector ETF performance swung to eight decliners versus only three gainers with Energy (XLE, +1.3%), Materials (XLB, +0.13%) and Real Estate (XLRE, +0.12%) in the green. Growth and value were split with value the outperformer. The Russell 1000 Value was +0.07% versus its Growth counterpart at -0.72% and clearly not an indication of the year overall.

• US House Price Index October year/year +4.5% versus prior +4.4% and month/month +0.4% versus forecast +0.4% and prior +0.7%.

• February WTI crude futures gained through most of the overnight session before rolling to red ahead of the US equities open, then bouncing and settling +$0.73/bbl, or +1.03%, to $71.72. All said, 2024 finished pretty close to where it started. Looking into 2025, supply glut fears and geopolitical tensions are likely to continue to battle for investors’ attention and create volatility and trading opportunities.
• Cocoa nearly tripled during 2024 to end the year as one of the largest commodity gainers. Coffee also enjoyed a banner year with more than 75% gains into the final day, while natural gas gained about 55%. Coking steel and soybeans were among the largest losers, down roughly 44% and 25%, respectively.

• TSLA Tesla will fix software in 77,650 China-made Model 3 and Model Y cars over safety hazards, China’s market regulator said on Tuesday

• TPX Tempur Sealy and Mattress Firm file slot concessions with the court and judge gives the FTC until Jan 8 to respond. Per CTFN
• TSN Tyson plans to restart Georgia meat plant in phases after fire

• VVI Viad Corp today announced it has completed the sale of its GES business to Truelink Capital for $535M and will relaunch as Pursuit Attractions and Hospitality, Inc., a standalone attractions and hospitality company with a singular focus on delivering unforgettable experiences in iconic destinations; will begin trading under new NYSE ticker, PRSU, on January 2, 2025.

• PWR Puerto Rico’s power grid collapses, leaving the island in the dark.
• DTM DT Midstream, Inc. announced that it has successfully closed on the acquisition of a portfolio of 3 FERC-regulated natural gas transmission pipelines from Oneok, Inc. effective as of 11:59 P.M. CT on Dec. 31, 2024, for a total cash consideration of $1.2B.
• HE Hawaiian Electric Industries, Inc. announced the closing of the sale of 90.1% of the common stock of American Savings Bank, F.S.B (ASB), previously its wholly owned subsidiary, to independent investors via separate agreements. The transaction values the bank at $450M

• BLK U.S. Federal Deposit Insurance Corporation has told asset manager BlackRock it has until Jan. 10 to accept an agreement that would allow the agency to step up scrutiny of its investments in FDIC-regulated banking institutions, according to a person familiar with the matter.

• V Credit card stocks largely brushed off a tweet by Sen. Bernie Sanders, in which he stated he will introduce legislation that would cap credit card interest at 10%, a Pres.-elect Trump campaign promise.
• BTC Coindesk: Don’t expect Bitcoin fireworks ahead of New Year, traders say, as BTC ETFs lose $420M – The broad-based CoinDesk 20 (CD20), an index tracking the largest tokens by market capitalization, minus stablecoins, lost 2.7% in the past 24 hours.”

• KZIA Kazia therapeutics provided update on paxalisib regulatory pathway following Type C Meeting with FDA – said FDA noted OS data not appropriate for accelerated approval; shares fell by almost half their value.
• COCP Saw its shares fall sharply after an update: Cocrystal Pharma to continue Phase 2A influenza challenge study with oral PB2 inhibitor CC-42344.
• PFE Drugmakers to raise US prices on over 250 medicines starting Jan. 1. Median price increase is 4.5%, in line with last year; Annual price increases have moderated, new drugs cost more; Pfizer to raise prices on more than 60 drugs. Per Reuters
• AMGN Amgen reported that the UK’s MHRA has approved tarlatamab approved to treat adult patients with small cell lung cancer.
• MRK Merck’s sotatercept approved by MHRA to treat PAH.

• HIMS Activist journalist Hunterbrook Media states that: Semaglutide Shortage Could End Any Day, Records Show. New reporting reveals the same may be imminent for semaglutide—threatening telehealth companies selling compounded versions

• BMWYY BMW and Yamaha Motor back US rare earths startup Phoenix Tailings to enhance domestic production of rare earths, crucial for high-tech manufacturing, as China’s export restrictions become stricter.
• X Nippon Steel proposed giving the U.S. government a veto over any reduction in U.S. Steel’s “production capacity” in a last-ditch bid for President Joe Biden’s approval to acquire the venerable American steelmaker, according to a document sent to the White House on Monday. Per WaPo.

• MLGO Nano-cap tech name gaps higher after PR mentions “quantum.” MicroAlgo Inc. announced the successful development of a groundbreaking quantum algorithm technology, specifically a FULL adder operation based on CPU registers in quantum gate computers.
• CYBR Shares of cyber security software solution company CyberArk moved higher after an analyst at Morgan Stanley wrote that the company would be a “major beneficiary” of news that the Chinese government had hacked the US Treasury.
• NFLX Netflix notes ‘Squid Game 2’ hits 68M views despite mixed reviews.

• BABA Alibaba’s cloud unit said on Tuesday it was cutting prices by up to 85% on its large language models.