January 6, 2025
Volume 12, Issue 01
Weekly Recap
The major domestic equity indexes provided mixed performance last week, although broad gains on Friday helped them push off their worst levels. Weakness at the beginning of the week was partially attributable to some profit-taking heading into the end of the year – Tuesday was the fourth consecutive day of declines for the S&P 500.
However, despite the year-end slump for U.S. equities (approximately 70 percent of trading sessions in December saw more stocks decline than advance), 2024 marked the second straight annual gain of over 20 percent for the S&P 500 and capped off the best two-year stretch in 25 years. The Nasdaq Composite also finished the year up over 20 percent for the sixth time in the past eight years.
It was a quiet week in terms of economic data releases around the New Year’s Day holiday, although the Chicago Purchasing Managers’ Index release on Monday did grab a few headlines. The index, which measures the economic health of the manufacturing sector in the Chicago region, came in at 36.9 in December, falling short of consensus expectations of 42.9 and declining from a reading of 40.2 in November. December marked the 13th consecutive month of contracting activity and the steepest month-over-month drop since May (readings below 50 are a sign of contraction, while readings above 50 indicate expansion).
Stocks also fell on Thursday, the first trading day of the new year, partially in response to the Atlanta Fed’s downward revision to its fourth-quarter gross domestic product forecast, from 3.1 to 2.6 percent. The revised forecast cited recent data releases from the U.S. Census Bureau that led to a reduction in expectations for real gross private domestic investment growth, from 1.3 to -0.7 percent. Several individual stock headlines also appeared to weigh on broader sentiment on Thursday, including Tesla’s report of fourth-quarter deliveries, which failed to meet consensus expectations. Also, declining iPhone shipments to China led to shares of Apple falling 2.62 percent on the day.
In more positive news, the Labor Department reported initial jobless claims of 211,000 for the week ended December 28. This was a decline from the prior week’s reading of 220,000 and was the lowest level in eight months. Continuing claims also fell for the prior week to a three-month low of 1.84 million. U.S. Treasuries advanced a bit last week as yields fell modestly across the yield curve.
Market Monitor
A full listing of market performance data is available here.
DQYDJ.com (“Don’t Quit Your Day Job”) offers helpful investment calculators here, including one that shows total returns for individual stocks.
Koyfin.com provides reams of data on individual stocks, including the ability to track total return — and just about anything else — over time.
In the News
A U.S. factory measure improved for a second month in December as orders and production picked up, suggesting the cloud over manufacturing may be starting to lift.
More Americans than ever will turn 65 in 2025. That will be a dominant theme for financial stocks in the years ahead.
Wall Street predictions for the year ahead are usually defined by expectations for growth, inflation, and other dull-but-worthy economic indicators. For 2025, those are all overshadowed by a person – and he is anything but dull.
The Department of Labor reported on Thursday that initial jobless claims – a proxy for layoffs – decreased by 9,000 week-over-week to a seasonally adjusted 211,000 claims last week, reaching an eight-month low. The data suggests a tight labor market that could lead the Federal Reserve to continue holding off on additional interest rate cuts. Investors are heading into 2025 in an optimistic mood, believing that with the economy on a firm footing and the White House in their corner, the stock market will continue to climb.
Charts of the Week
I found the following articles to be of note. Some may be of interest only to advisors while others are aimed more broadly. You may hit paywalls below; many can be overcome here.
- Even Rich Retirees Fear Outliving Their Money (Anne Tergesen)
- Our Retirement Goal for 2025: Make Home a Place of Comfort – and Change (Karen Kreider Yoder & Stephen Kreider Yoder)
- 5 big compliance trends in 2024 (Dan Shaw)
This is the best thing I’ve read recently. The loveliest. The funniest. The creepiest. The most powerful. The most insightful. The most intriguing. The most interesting. Scary?
Over the past 10 years, the total return for the Bloomberg U.S. Aggregate Bond Index is +14 percent – about 1.3 percent per year. Over the past 5 years, it’s down 1.5 percent in total. It’s therefore safe to say this has been one of the worst periods ever to be a fixed income investor.
“Be at war with your vices, at peace with your neighbors, and let every new year find you a better man.” ~ Ben Franklin
Securities and advisory services are offered through Madison Avenue Securities, LLC, a member of FINRA and SIPC, a registered investment advisor. This report provides general information only and is based upon current public information we consider reliable. Neither the information nor any opinion expressed constitutes an offer or an invitation to make an offer, to buy or sell any securities or other investment or any options, futures, or derivatives related to such securities or investments. It is not intended to provide personal investment advice and it does not take into account the specific investment objectives, financial situation, and the particular needs of any specific person who may receive this report. Investors should seek financial advice regarding the appropriateness of investing in any securities, other investment, or investment strategies discussed or recommended in this report and should understand that statements regarding future prospects may not be realized. Investors should note that income from such securities or other investments, if any, may fluctuate and that price or value of such securities and investments may rise or fall. Accordingly, investors may receive back less than originally invested. Past performance is not necessarily a guide to future performance. Diversification does not guaranty against loss in declining markets. Madison Avenue Securities, LLC | 13500 Evening Creek Drive N, Suite 555 | San Diego, CA 92128 US
