Dow was off 20, advancers over decliners 2-1 & NAZ went up 30. The MLP index added 3+ to the 297s & the REIT index slid back 1 to the 397s. Junk bond funds eased higher & Treasuries had very limited buying, keeping yields little changed. Oil gained 1+ to the 73s boosted by China stimulus hopes & gold jumped 26 to 2667.
Dow Jones Industrials
Total deliveries Q4 2024: 495,570
Total production Q4 2024: 459,445
Total annual deliveries 2024: 1,789,226
Total annual production 2024: 1,773,443
Results
for the qtr represented the first annual drop in delivery numbers, which reported 1.8M deliveries in 2023 & it reported
485K deliveries in the 4th qtr of 2023. The forecast had expected deliveries of 505K,
including 474K Model 3 & Model Y EVs. TSLA sent some investors a
company-compiled delivery consensus of 507K vehicles, based on a
survey of 26 analysts. A widely followed independent TSLA researcher,
who publishes as Troy Teslike, predicted deliveries of 501K. Deliveries
are the closest approximation of sales reported by TSLA but are not
precisely defined in the company's shareholder communications. The 4th-qtr report comes after a huge late-year rally in its
stock, which finished 2024 up 63%. In mid-Dec, the shares reached a record, eclipsing their prior all-time high from 2021. The stock dropped 22 (6%).
Tesla shares slide after it reports first drop in annual deliveries
A sharp rise in mortgage interest rates toward the end of Dec took its toll on mortgage demand, hitting just as the housing market entered its typically slowest stretch of the year. Total mortgage application volume for the last 2 weeks dropped 21.9% compared with the week before that period, according to the Mortgage Bankers Association's (MBA) seasonally adjusted index. An additional adjustment was made to account for the Christmas holiday. The MBA released 2 weeks of data after being closed over the holiday. During that time, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of $766K or less increased to 6.97% from 6.89%, with points rising to 0.72 from 0.67, including the origination fee, for loans with a 20% down payment. Mortgage rates, which had been lower than the previous year for much of 2024, were 21 basis points higher annually. “Mortgage rates moved higher through the last full week of 2024, reaching almost 7% for 30-year fixed-rate loans,” said Mike Fratantoni, chief economist at the MBA. “Not surprisingly, this increase in rates — at a time when housing activity typically grinds to a halt — resulted in declines in both refinance and purchase applications.” Applications to refinance a home loan, which are most sensitive to interest rate gyrations, fell 36% from 2 weeks before. Still, they remained 10% higher than the same period 1 year ago. The refinance share of mortgage activity decreased to 39.4% of total applications from 44.3% the previous week. Applications for a mortgage to purchase a home fell 13% during the 2 weeks & were 17% lower than the same period 1 year ago. While Dec is typically the slowest month of the year for home sales, these numbers are seasonally adjusted & the annual comparison shows considerable weakness. While there are more homes on the market now than there were last year at this time, many of those houses have been sitting for months, due to high prices & higher interest rates. Mortgage rates started this week above 7% on the 30-year fixed, according to a separate survey from Mortgage News Daily. Given the holidays falling midweek this year, there is significant volatility in all of these numbers. “There’s no way to know where the bond market will open up on Thursday,” wrote Matthew Graham, chief operating officer at Mortgage News Daily. “The final or first trading day of any given year can see some excess volatility/momentum for reasons that have nothing to do with the normal motivations (economic data, news, policy changes).”
Mortgage demand dives nearly 22% to end 2024
The € & £ hit multi-month lows against the $, as the fresh trading year kicked off & investors geared up for the return of Donald Trump to the White House this month. The € was 0.66% lower against the greenback at $1.0285, hitting its weakest level since Nov 2022 & the £ dropped 1.14% to $1.237, an 8-month low. Optimism around the US economy & equities was in focus as markets reopened following disrupted trade over Christmas & the New Year. “Already [U.S.] growth has kept outpacing forecasts as consumers and companies have shrugged off the impact of high interest rates, with the unemployment rate remaining low,” Susannah Streeter, head of money & markets at Hargreaves Lansdown, said. “Investors are hopeful that a goldilocks scenario will be the story of 2025, amid promises of lower taxes and deregulation under a second Trump presidency.” Some improvement in growth is expected in 2025, but forecasts for Europe remain comparatively downbeat, particularly with Trump's threat of sweeping tariffs & a potential trade war clouding the picture. Revised figures published last week showed the UK economy stagnated in the 3rd qtr, while economists warn that political instability & structural issues will drag on Germany, France & other euro zone nations this year. Those outlooks have significantly pulled on currency markets in recent months, with inflationary risks from Trump's tariff proposals expected to lead to fewer Federal Reserve interest rate cuts in 2025. The ECB & Bank of England meanwhile appeared slightly more dovish at their Dec meetings. Higher interest rates are generally supportive of the domestic currency.
Euro and British pound tumble against U.S. dollar as markets brace for Trump return
Stocks rose to kick off the first trading day of the new year as traders returned from holiday. Markets are eyeing a comeback after a year-end slide to begin the week dented hopes for a Santa Claus rally. The decline capped a blowout 2024 for US stocks that saw the S&P 500 post 2 years in a row of over-20% gains, something it hasn't achieved in almost 3 decades. However early buying of stocks has faded in the last hour.
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