Dow went up 28, advancers over decliners about 5-4 & NAZ was down 10. The MLP index dropped 5+ to the 491s & the REIT index was even at 401. Junk bond funds remained slightly higher & Treasuries had limited buying, taking yields lower. Oil slid back to the 69s & gold went up 18 to 2654 (more on both below).
Dow Jones Industrials
Mortgage rates rose again this week to end the year slightly higher than where they began. The average 30-year fixed-rate mortgage rate was 6.85% for last week, according to Freddie Mac data. That's up from 6.72% a week earlier. Average 15-year mortgage rates rose to 6% from 5.92%. “Mortgage rates increased for the second straight week, rebounding after a decline from earlier this month,” Sam Khater, Freddie Mac's chief economist, said. “While a slight improvement in new and existing home sales is encouraging, the market remains plagued by an overwhelming undersupply of homes. A strong economy can help build momentum heading into the new year and potentially boost purchase activity.” The latest increase in rates follows the Federal Reserve's meeting & interest rate cut last week. Central bank officials signaled that they're likely to cut benchmark interest rates just twice next year, while many analysts & economists had expected as many as 4 reductions in 2025. Mortgage rates move largely on expectations about the direction of interest rates in the future & the new information suggesting benchmark rates will stay higher for longer sent mortgage rates rising. 30-year mortgage rates spent much of 2024 in the 6-7% range, though the path was choppy. They peaked in May at 7.22% before falling for much of the summer to as low as 6.08% in Sep. In recent weeks, uncertainty about Pres-elect Trump’s economic policies, coupled with the Fed's slower rate-cutting timeline, pushed rates closer to 7% once again.
Mortgage rates jump to end 2024 higher than where they started
The number of Americans applying for unemployment benefits held steady last week, though continuing claims rose to the highest level in 3 years. Jobless claim applications ticked down by 1000 to 219K last week, the Labor Dept reported. That's fewer than the 223K forecast. Continuing claims, the total number of Americans collecting jobless benefits, climbed by 46K to 1.9M for the latest week. That's more than projected & the most since the week of Nov 2021 when the labor market was still recovering from the COVID-19 jobs wipeout in the spring of 2020. The 4-week average of weekly claims, which quiets some of the week-to-week volatility, inched up 1K to 226K. Weekly applications for jobless benefits are considered representative of US layoffs. The labor market has hinted at some softening recently but remains broadly healthy & has held up better than many predicted considering that interest rates have been elevated for years. The Federal Reserve instituted a series of rate increases in 2022 & into 2023 to try to tame the 4-decade high inflation that emerged during the US economy's rebound from a brief but sharp pandemic recession.
Continuing unemployment claims rise to 3-year high
Apple (AAPL), a Dow stock, hit an all-time intraday high today after a nod of confidence in its continued upswing from investors. Its stock touched $260 early today, a record
intraday high, before modestly paring gains. The stock was still on
track to notch another record close after hitting a high of $258 on
Christmas Eve. Shares have rallied more than 11% over the past month, & the iPhone maker is nearing a $4T market cap. AAPL is closing 2024 on clashes with antitrust regulators at home & abroad. Early data from the initial rollout of its iPhone 16 lineup didn't do much to bolster its confidence, with investment firm Jefferies issuing a rare downgrade on the stock. Other analysts, stayed bullish on the stock
as more positive iPhone shipment data engendered confidence in its
artificial intelligence strategy for its consumer devices. 4th qtr earnings report in early Nov showed the tech giant beating expectations on iPhone sales, despite missing estimates overall. Macroeconomic uncertainty could create headwinds for AAPL. Trump's
tariffs on China could impact prices for AAPL products assembled in the
country, with the worst case scenario adding $256 of cost per iPhone. The Federal Reserve's projection that it would lower interest rates less than expected in 2025 also caused fears of persistent higher rates & sticky inflation, dampening consumer confidence heading into the new year. The stock rose 82¢ for a new record.
Apple stock touches intraday high after nod of confidence from Wall Street
Gold prices rose, driven by safe-haven demand amid light trading volumes following the Christmas holiday, as markets await signals regarding the US economy under the incoming Trump administration & Federal Reserve's rate strategy for 2025. Spot gold rose 0.7% to $2633 per ounce & US. gold futures added 0.6% to $2650. Some of gold's gains had to do with what's going on in Ukraine with Russia hitting Ukraine's electrical system. Pres Biden said asked the Defense Dept to continue its surge of weapons deliveries to Ukraine after condemning Russia's Christmas Day attack against some of Ukraine's cities & its energy system. Gold will still be purchased by central banks, & as inflation continues, there could be increased demand for gold on the retail side as well. Gold is considered a hedge against geopolitical turmoil & inflation, but higher rates reduce the appeal of holding the non-yielding asset. The yellow metal has gained 28% so far this year and saw an all-time peak of $2790 on Oct 31.
Gold rises on safety demand as markets look to 2025 in holiday lull
Oil rose as stimulus measures in China may help to bolster demand & a US industry report flagged another drop in stockpiles. Brent climbed toward $74 a barrel after a 1.3% gain on Tues, with West Texas Intermediate above $70. In a bid to bolster growth, China is giving local officials more leeway in how they invest proceeds of gov bonds, while keeping interest rates steady for now. Policymakers pledged a "moderately loose" monetary stance in the top crude importer earlier this month.
Oil Holds Gains with Focus on US Stockpiles
Stocks were little changed after the Christmas holiday. Investors digested 1 of the only significant economic data points of the week. Markets looked to be struggling bid to extend the start of the Santa Claus rally which kicked off with a bang Tues as the S&P 500 notched its best Christmas Eve performance since 1974.
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