Early Look

Thursday, January 2, 2025

After recording losses for the S&P 500 in the final 4-trading days of the year, futures are looking higher despite news of two apparent terrorist attacks over the weekend in New Orleans and possibly Las Vegas. Meanwhile, the “Santa Claus” rally (or the last five trading days of the year, combined with the first two of the following year) has stalled thus far after a 1% start to kick off the period, but still technically has two days left. U.S. stocks closed out 2024 with losses, as the S&P 500 fell -2.5% in December, the Nasdaq climbed 0.48%, and the Dow fell -5.27%, but still ended the year with big gains. For the quarter, the S&P 500 gained 2.07%, the Nasdaq climbed 6.17%, and the Dow climbed 0.51%. For the year, the S&P 500 gained 23.31% (and up 53.19% over past two years, the biggest 2-year % jump since 1997-1998), the Nasdaq climbed 28.64%, and the Dow climbed 12.88%. For 2024 SPX sectors, Communication Services (XLC) and Tech (XLK) led the way higher with surges of 33% and 28% and Consumer Discretionary (XLY) gained 25.4%. Financials (XLF) were best outside of tech, rising 28.5% on the year. Materials (XLB) were down (-1.8%), as the sole losing S&P sector, with Healthcare (XLV) +0.87%. The 10-year Treasury yield rose three basis points on Tuesday to 4.58%. Up 72 basis points for the full year, the 10-year yield has surged 98 basis points from its 2024 low of 3.6% set on Sept. 17, just before the Federal Reserve’s first rate cut. The U.S. dollar index rises +0.25% to 108.80, its highest level since November 2022. In Asian markets, The Nikkei Index was closed while the Shanghai Index fell -89 points to 3,262, and the Hang Seng Index dropped -436 points to 19,623. In Europe, the German DAX is down -71 points to 19,837, while the FTSE 100 is up 10 points to 8,182.

• The Dow Jones Industrial Average fell -29.51 points, or 0.07%, to 42,544.22.
• The Nasdaq Composite slumped -175.99 points, or 0.90%, to 19,310.79.
• The Russell 2000 Index advanced 2.38 points, or 0.11% to 2,230.16.

• 8:30 AM ET                  Weekly Jobless Claims…est. 222K
• 8:30 AM ET                  Continuing Claims…est. 1.89M
• 9:45 AM ET S&P Global Manufacturing PMI, Dec -Final…prior 48.3
• 10:00 AM ET                Construction Spending M/M for November…est. +0.3%                         
• 10:30 AM ET                Weekly EIA Natural Gas Inventory Data
• 11:00 AM ET                Weekly DOE Inventory Data
• 11:00 AM ET                Fed’s Barkin Gives Keynote Address

• Earnings After the Close: LFCR RGP

• The bull-bear spread in the American Association of Individual Investors (AAII) weekly survey was 1.2 vs 3.7 last week. Bulls fall to 35.4% from 37.8%, Neutrals rise to 30.4% from 28%, Bears rise to 34.2% from 34.1%.
• Chinese government hackers breached a highly sensitive office in the Treasury Department that administers economic sanctions against countries and groups of individuals according to U.S. officials.
• ECB Hopes to Hit 2% Inflation Target in 2025, Lagarde says: “We have made significant progress in 2024 in bringing down inflation and hopefully 2025 is the year when we are on target as expected and as planned in our strategy,” she said in a video posted on X on Wednesday.

• BYD Corp. (BYDDF) said 2024 new energy vehicles sales +41.26% to 4.2721 mln units; December new energy vehicles sales 514,800 units
• Li Auto Inc (LI) delivered 58,513 vehicles in December 2024, reflecting a 16.2% year-over-year increase; total deliveries for full year of 2024 reached 500,508 vehicles.
• Nio Inc. (NIO) said 31,138 vehicles were delivered in December 2024, increasing by 72.9% y/y; 72,689 vehicles were delivered in three months ended December 2024, increasing by 45.2% y/y; 221,970 vehicles were delivered in 2024 in total, increasing by 38.7% y/y.
• Tesla (TSLA) CEO Elon Musk said yesterday on “X” related to the CyberTruck explosion outside of the Trump hotel in Las Vegas that the company “confirmed that the explosion was caused by very large fireworks and/or a bomb carried in the bed of the rented Cybertruck and is unrelated to the vehicle itself. All vehicle telemetry was positive at the time of the explosion.”
• Topgolf Callaway (MODG) upgrades to buy from hold at Jefferies, saying the stock appears to be oversold.
• Xpeng (XPEV) said 36,695 units were delivered in December 2024, an 82% increase y/y; 190,068 units delivered for full year 2024, a 34% increase y/y; 91,507 units delivered in q4 2024, a 52% increase y/y, exceeding upper end of quarterly guidance range for Q4.

• Lockheed Martin (LMT) downgraded to Hold from Buy at Deutsche Bank with $523 tgt.
• RTX (RTX) upgraded to Buy from Hold at Deutsche Bank with $400 tgt.
• TransDigm (TDG) downgraded to Hold from Buy at Deutsche Bank.

• U.S. Bancorp (USB) upgraded to Buy from Neutral at DA Davidson and raise tgt to $60 from $58 saying shares are at an early stage of an inflection and set to regain positive operating leverage above 0.5%.
• VICI Properties (VICI) upgraded to Outperform from Neutral at Wedbush.

• Mettler-Toledo (MTD) was upgraded to Outperform from In Line at Evercore ISI.

• Nvidia (NVDA) invested $1B in artificial intelligence companies in 2024, The Financial Times reported.
• Synaptics (SYNA) and Google (GOOGL) collaborate on edge AI for the IoT