Dow slid back 418 but finished off early lows, decliners over advancers 3-2 & NAZ declined 235. The MLP index edged up to the 293s & the REIT index fell 1 to the 396s. Junk bond funds were mixed & Treasuries continued to be purchased which lowered yields from recently high levels (more below). Oil was up slightly but finished below 71 & gold was of 2 to 2619 (more on both below).
Dow Jones Industrials
The New York Stock Exchange (NYSE) & the NAZ will participate in the national day of mourning for the late Pres Jimmy Carter on Jan 9 by closing their markets. The NYSE said that the NYSE, NYSE American Equities, NYSE American Options, NYSE Arca Equities, NYSE Arca Options, NYSE Chicago & NYSE National will not operate on Jan 9, in honor of the former pres. All of NAZ's US equities & options markets will similarly close that day, NAZ said. Carter, who served in the White House from 1977-1981, died yesterday. He was 100 years old. "Jimmy Carter, with humble roots as a farmer and family man, devoted his life to public service and defending our freedom. During his noteworthy post-presidential life, President Carter left an enduring legacy of humanitarianism," NYSE Group Pres Lynn Martin said. "The NYSE will respectfully honor Pres Carter's lifetime of service to our nation by closing our markets on the National Day of Mourning." "We mourn the loss of President Carter and will be closing our U.S. markets during the National Day of Mourning to celebrate his life and honor his legacy," NAZ Pres Tal Cohen said. "On behalf of Nasdaq, we extend our deepest condolences to the Carter Family." The national day of mourning for Carter was announced by Pres Biden, who at the same time instructed public buildings & the military to lower their flags to half-staff for 30 days.
NYSE, Nasdaq to close Jan. 9 for national day of mourning following death of Jimmy Carter
Treasury yields slipped in 1 of the final trading days of the year got underway. The yield on the 10-year Treasury was down by about 7 basis points at 4.547%, trading just below multimonth highs recorded last week & the 2-year Treasury yield was last trading at 4.254% after dipping by about 7 basis points. Yields & prices move in opposite directions & 1 basis point equals 0.01%. Investors focused on the end of the year & qtr, & considered the outlook for the US economy & the path ahead for monetary policy from the Federal Reserve in 2025. The Fed indicated that fewer interest rate cuts were on the horizon when it met earlier this month. Policymakers will make their first rate decision of 2025 in late Jan. Long-term interest rates have risen in recent months, despite the Fed's cuts, as traders dial back expectations for further central bank action next year. Data released last week showed that weekly initial jobless claims for the week ending Dec 21 fell slightly & came in below expectations, while continuing claims for the week ending Dec 14 jumped to the highest level since Nov 2021.
Treasury yields dip as final trading week of 2024 kicks off
Housing contract activity picked up again in Nov as buyers shrugged off elevated mortgage rates & took advantage of higher inventory levels. The Pending Home Sales Index, which tracks contract signings on existing homes, rose 2.2% from Oct to 79, its highest reading since Feb 2023, according to the National Association of Realtors (NAR). An index level of 100 is equal to contract activity in 2001. It's the 4th straight month of gains. Pending home sales are up 6.9% compared to Nov 2023. “Consumers appeared to have recalibrated expectations regarding mortgage rates and are taking advantage of more available inventory,” Lawrence Yun, NAR's chief economist, said. Last month, housing contract activity rose in all regions of the country except for the Northeast. The South saw the largest month-over-month increase, improving 5.2% from Oct & 8.5% from a year ago. All parts of the country saw more contract activity compared with Nov 2023, led by an 11.8% jump in the West. Although the market is picking up, 2024 is on track to be 1 of the slowest years for existing home sales in decades. High prices, coupled with elevated mortgage rates, have kept many potential buyers & sellers sidelined. Still, after 2 years of mortgage rates above 6%, Yun said buyers may be adjusting. “Buyers are no longer waiting for or expecting mortgage rates to fall substantially,” the statement said. “Furthermore, buyers are in a better position to negotiate as the market shifts away from a seller’s market.” The NAR expects 4.5M existing home sales next year. As of Nov, existing home sales were at a seasonally adjusted annual rate of 4.15M.
Pending sales of existing homes rise to highest level since Feb. 2023
Gold prices dipped in thin trading as traders awaited fresh catalysts, including next week's US economic data that could influence the Federal Reserve's 2025 interest-rate outlook, as well as policies from incoming Pres Trump. Spot gold fell 0.7% to $2602 per ounce & US gold futures were down 0.7% at $2615. The holiday with thin trade & perhaps some squaring of the books before year-end could be at play. Geopolitical tensions are expected to remain high into next year, with central banks continuing to buy gold, while the US debt situation is likely to worsen & the deficit to grow under the Trump administration, fueling ongoing safe-haven demand for the metal. Gold has surged nearly 27% this year, reaching a record high of $2790 on Oct 31, as investors sought the yellow metal amid geopolitical uncertainty & US rate cuts.
Gold prices dip as markets await fresh catalysts
Oil slipped in quiet end-of-year trading, as the market focused on the outlook for 2025 while monitoring Middle East developments. West Texas Intermediate traded near $70 a barrel after rising 1.6% last week & Brent was below $74. There are widespread expectations that the market will be oversupplied next year, which is likely to make it harder for OPEC & its allies to revive idled production. Oil is heading for a modest loss this year, with trading confined to a narrow range since mid-Oct. The market has been buffeted by bearish & bullish signals, including persistent hostilities in the Middle East. Traders will be also watching for any fallout from a Trump administration. WTI for Feb was lower at $70.41 a barrel & Brent for Feb, which expires tomorrow, dipped 0.5% to $73.80 a barrel.
Oil Dips in Thin Trading as Traders Focus on 2025 Outlook
Stocks fell, with the woes of the 3 major indices continuing in the final week of the year as an otherwise strong 2024 comes to a close. But interest in Treasuries brought buying in the 10-year Treasury & its yield retreated from a 7-month high to hover near 4.55%. The highly anticipated "Santa Claus" rally, which is statistically 1 of the most consistent 7-day positive stretches of the year for the S&P 500, has flopped thus far.
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