Dow slid back 87, advancers over decliners 4-3 & NAZ declined 28. The MLP index added 2+ to the 316s & the REIT index rose 4+ to the 396s. Junk bond funds were little changed & Treasuries had limited buying which reduced yields. Oil was off 1+ to the 78s after its recent rise & gold soared 36 to 2754.
Dow Jones Industrials
The backbone of the US economy, the American small business, may be breaking beyond repair without some serious intervention, a new study by private digital lender Biz2Credit shows. Data from the study was pulled from more than 100K financing applications submitted to Biz2Credit between Jan 2022 & Dec 2024 shows a sharp decline in the earnings of small businesses toward the end of 2024, a trend the lender sees continuing into 2025. The study underscores concern about the economy after 4 years of Bidenomics, or Pres Biden's policies that involve taxes & regulations on the business community while providing tax incentives for some targeted industries that align with his progressive agenda. Despite strong headline numbers of GDP growth & low unemployment, problems such as inflation & regulatory costs have hit certain segments of the economy harder than others. "Small business owners went on a roller coaster ride in 2024. Earnings grew until July and declined every month through December," said Rohit Arora, Biz2Credit's CEO & co-founder. "Average monthly earnings dropped by almost $68,000 in comparison to 2023 and also were lower than they were in 2022." The reason for the decline is that small businesses don't have the scale to spread costs over a large balance sheet & are hit hardest by inflation, which, while abating, has led to high prices for goods that haven't. The incoming Trump administration has vowed to lighten regulations & taxes on small businesses to regain the growth lost during the Biden years. "Trump was elected based on his promise to fix the economy, and he says it will be a priority from Day 1," said Arora. "Based on our data on later months of 2024, the start of 2025 could be a rocky one for small businesses." The survey, for instance, shows that small businesses suffered a 43% decline in profits during 2024. The average monthly earnings of surveyed businesses for the first 11 months of 2024 came out to $87K compared with $150K in 2023, the worst yearly average since 2020. 1 major problem for small businesses has been the persistence of high prices. Business-related costs have dramatically increased with average monthly expenses coming in at $664K compared with $364K the year prior. On a bright note, the National Federation of Independent Business (NFIB) published its latest Small Business Optimism Index, showing that optimism on Main Street jumped 3.4 points to 105.1 in Dec. It marked the highest reading since Oct 2018, as small business owners hope for improving economic conditions under Trump.
Small business earnings plunge despite US GDP growth
Bank of America (BAC) posted results that topped expectations for profit &
revenue on better-than-expected investment banking & interest income. 4th-qtr profit more than doubled to $6.7B (82¢ per share) from a year earlier, when the bank had a $2.1B
Federal Deposit Insurance Corp assessment tied to the 2023 regional
bank failures & a $1.6B charge tied to accounting on interest
rate swaps. Revenue jumped 15% to $25.5B on rising fees from investment banking & asset management & stronger trading results. EPS rose to 82¢ vs 77¢ expected & revenue was $25.5B vs $25.2B expected. Investment
banking fees surged 44% to $1.65B, roughly $180M expected. That indicates the company's bankers had a
strong end to the year, as just last month, CEO Brian Moynihan said
investors that investment banking fees would jump 25% in the qtr. The firm said that net interest income, 1 of the most watched figures
for the lender, rose 3% to $14.5B, exceeding estimates by about
$170M. Perhaps more than other megabanks, the firm’s fortunes seem to hinge on
rates & their impact on net interest income. Investors will be keen to
hear about the company’s target for 2025, especially as expectations
for rate cuts have been reined in. The stock fell 77¢.
Bank of America tops estimates on better-than-expected investment banking, interest income
Sales of all-electric vehicles & hybrid models reached 20% of new car & truck sales in the US for the first time last year, marking a landmark year for “green” vehicles but coming at a slower pace than many had previously anticipated. Auto data firm Motor Intelligence reports more than 3.2M “electrified” vehicles were sold last year, or 1.9M hybrid vehicles, including plug-in models, & 1.3M all-electric models. Traditional vehicles with gas or diesel internal combustion engines still made up the majority of sales, but declined to 79.8%, falling under 80% for the first time in modern automotive history. Regarding sales of pure EVs, Tesla (TSLA) continued to dominate, but Cox Automotive estimated its annual sales fell & its market share dropped to about 49%, down from 55% in 2023. The Tesla Model Y & Model 3 were estimated to be the bestselling EVs in 2024. Following TSLA in EV sales was Hyundai Motor, including Kia, at 9.3% of EV market share; General Motors (GM) at 8.7%; & then Ford (F) at 7.5%, according to Motor Intelligence. BMW rounded out the top 5 at 4.1%.
EV, hybrid sales reached a record 20% of U.S. vehicle sales in 2024
Stocks wavered, with the major indices struggling to build on the previous day's surge amid another round of big bank earnings. Investors also watched as the Senate hearing kicked off for Pres-elect Trump's pick for Treasury Secretary, Scott Bessent. Markets are coming off a major 1-day rally on the heels of a surprise easing in consumer inflation that prompted questions about whether the pricing out of interest-rate cuts this year had gone too far. Stocks ripped higher yesterday on the back of the data & stellar earnings from major US lenders. Traders have now adjusted thinking that the Federal Reserve could lower rates before Jul, reversing the pile-out that was sparked by the stronger-than-expected Dec jobs report.
No comments:
Post a Comment