Markets are lower in the final trading week of 2024

Dow dropped 451, decliners over advancers about 3-1 & NAZ sank 244.  The MLP index wobbled in the 292s & the REIT index retreated 3+ to the 393s.  Junk bond funds inched higher & Treasuries were purchased, taking yields lower from 7 month highs.  Oil was higher, going over 71, & gold declined 17 to 2614.

Dow Jones Industrials

Google (GOOGL) CEO Sundar Pichai told employees last week that “the stakes are high” for 2025, as the company faces increased competition & regulatory hurdles & contends with rapid advancements in artificial intelligence.  At a 2025 strategy meeting on Dec 18, Pichai & other GOOGL leaders, donning ugly holiday sweaters, hyped up the coming year, most notably as it pertains to what's coming in AI.  “I think 2025 will be critical,” Pichai said.  “I think it’s really important we internalize the urgency of this moment, and need to move faster as a company. The stakes are high. These are disruptive moments. In 2025, we need to be relentlessly focused on unlocking the benefits of this technology and solve real user problems.”  Some employees attended the meeting in person at GOOGL's headquarters in Mountain View, California & others tuned in virtually.  His comments come after a year packed with some of the most intense pressure GOOGL has experienced since going public 2 decades ago.  While areas like search ads & cloud produced strong revenue growth, competition picked up in GOOG's core markets, & the company faced internal challenges including culture clashes & concerns about Pichai's vision for the future.  Additionally, regulation is now heavier than ever.  In Aug, a federal judge ruled that GOOGL illegally holds a monopoly in the search market.  The Justice Dept in Nov asked that GOOGL be forced to divest its Chrome internet browser unit.  In a separate case, the DOJ accused the company of illegally dominating online ad technology.  That trial closed in Sep & awaits a judge ruling.  GOOGL stock fell 1.43.

Google CEO Pichai tells employees to gear up for big 2025: ‘The stakes are high’

Accident investigators are trying to figure out what caused a Jeju Air flight to belly land without its landing gear down at Muan Intl Airport in South Korea, killing all but 2 of the 181 people on board as it burst into flames in the nation's worst air disaster in decades.  South Korea's acting Pres Choi Sang-mok ordered an emergency inspection of the country's Boeing (BA), a Dow stock 737-800s, the type of plane used on the the fatal Jeju Air Flight 7C2216.  The BA 737-800 is one of the world's most commonly used airplanes & it has a strong safety record.  It predates the BA 737 Max, the type that was involved in 2 fatal crashes in 2018 & 2019 that killed all 346 people on board those flights.  The 737 Max was grounded for almost 2 years.  There are nearly 4400 of the 737-800s operated around the world.  That means the model makes up about 17% of the world's in-service commercial passenger jet fleet.  The average age of the world's 737-800 fleet is 13 years old & the last of the series of planes were delivered about 5 years ago.  Jeju Air took delivery of the plane which was involved in this weekend's crash in 2017.  It was previously operated by European discount carrier Ryanair, according to Flightradar24.  The plane involved in the crash was about 15 years old.  Aerospace experts say it’s unlikely that investigators will find a design problem with the long-flying aircraft.  “The idea that they’ll find a design flaw at this point is borderline inconceivable,” said Richard Aboulafia, managing director at AeroDynamic Advisory, an aerospace consulting firm.  BA stock fell 3.50.

Boeing 737-800, the model that crashed in South Korea, is one of the world’s most popular aircraft

US retail closures have reached the highest level since the COVID-19 pandemic, according to recent estimates.  As of Nov 8, retailers have announced 6481 store closures this year, an increase of 336 closures in just the past week, according to the latest data from Coresight Research.  The majority of these closures were driven by American Freight, which is shutting all 329 of its locations as part of its parent company's bankruptcy proceedings.  Coresight also recorded 5363 store openings this year as of Nov 8, including 30 openings last week.  However, closures are still outpacing openings, a shift from the trend of the past 2 years, John Mercer, Coresight's head of global research, said.  In 2021, closures exceeded openings by only 180 stores & in 2020, the gap was much larger, with closures outpacing openings by nearly 6000 stores.  Additionally, Coresight tracked 43 retail bankruptcies this year, a sharp increase from the 25 bankruptcies recorded in 2023.  Mercer cited multiple macroeconomic factors hindering retailers.  While inflation has come down, consumers are looking at the prices rather than the rate of inflation, causing them to remain cautious regarding their spending.  At the same time, higher interest rates have hindered operations to some degree.  If a retailer holds any debt, the cost of that debt will increase because interest rates are considered considerably higher than they were a few years ago, Mercer said.  "You see these pressures on both sides, and then you've got other costs feeding in," he added.

US retail closures hit highest level since pandemic

The major indices are trading lower. It follows a sharp sell-off on Fri when NAZ shed 1.5%.  BA is leading the decline.  South Korean officials ordered all BA 737-800 planes to be inspected after a Jeju Air crash.  The stock market will be closed on Wed for the New Year's holiday.  Also US stock markets will close Jan 9 on Carter day of mourning.