Markets retreat with selling pressured by higher Treasury yields

Dow dropped 178, decliners over advancers better than 5-2 & NAZ sank 375.  The MLP index dipped 1+ to the 298s & the REIT index fell 2+ to the 391s.  Junk bond funds continued to be weak & Treasuries saw more selling which raised yields (more below).  Oil finished higher to the 74s after late day buying & gold rose 15 to 2663 (more on both below).

Dow Jones Industrials 

Activity in the US services industry accelerated in Dec but brought with it a sharp rise in expectations for price increases as businesses grew concerned about the impact tariffs would have on inflation.  The Institute for Supply Management's (ISM) services index posted a reading of 54.1%, representing the share of businesses expecting growth.  That was up 2 percentage points from Nov & better than the survey showing forecast of 53.4%.  Along with the better overall reading, the prices index jumped to 64.4%, an increase of 6.2 points or more than 10%.  It was the first time the index had eclipsed 60% since Jan 2024, said Steve Miller, chair of ISM's Business Survey Committee.  The prices index hit its highest level since Feb 2023.  “There was general optimism expressed across many industries, but tariff concerns elicited the most panelist comments,” Miller said.  Pres-elect Trump has vowed to enact sweeping tariffs after he takes office later this month.  Trump denied a report that he was considering a narrower, more targeted approach.  The ISM manufacturing survey for the month also reflected higher prices, with the index rising to 52.5%, up 2.2 points on the month.  Treasury yields, particularly at the longer-dated end of the curve, moved higher following the release.  The benchmark 10-year note most recently yielded 4.68%, up 0.065 percentage point, or 6.5 basis points, on the session.

Services index shows big jump in prices for December as companies fear tariffs

Johnson & Johnson (JNJ), a Dow stock & Dividend Aristocrat, said its lung cancer regimen keeps people alive for at least a year longer than AstraZeneca's (AZN) Tagrisso, the go-to drug for a certain type of lung cancer.  JNJ said its drugs, Rybrevant & Lazcluze, showed a statistically significant & clinically meaningful improvement to survival relative to Tagrisso in a pivotal trial.  The company expects the benefit to be at least a year & possibly longer, JNJ execs added.  The company plans to present the full results at a medical meeting later this year.  “This is an absolute igniter,” said Biljana Naumovic, pres of US Oncology Solid Tumor at JNJ Innovative Medicine.  “People were looking for an overall survival difference.”  JNJ is trying to supplant AstraZeneca's (AZN)'s blockbuster Tagrisso, a once-daily pill that has transformed the treatment of non-small cell lung cancer with EGFR mutations & extended the median survival to about 3 years.  These genetic errors cause cancer cells to proliferate.  They're responsible for 10-15% of lung cancer cases in the US, according to the American Lung Association.  JNJ execs hailed the result as a game-changer that should change the treatment of this type of lung cancer.  But there's no guarantee doctors & patients will all switch to using Rybrevant & Lazcluze since the regimen comes with more side effects & requires infusions every few weeks, said Dr Stephen Liu, director of thoracic oncology & head of developmental therapeutics at Georgetown University's Lombardi Comprehensive Cancer Center.  “I think the announcement that this leads to people living longer will force a harder look,” Liu said.  He wants to see who benefited the most so he can treat those patients more aggressively while sparing those who are less likely to respond.  Rybrevant & Lazcluze can cause people to develop a rash & lead their fingernails to split.  Like Tagrisso, JNJ's regimen blocks the EGFR protein to prevent cancer cells from growing.  It also targets MET, a common pathway cancer uses to develop resistance to drugs.  JNJ forecasts Rybrevant & Lazcluze's annual sales could top $5B.  Tagrisso brought in about $6B for AZN in 2023.  JNJ stock went up 2.56 & AZN stock slid back 20¢.   

J&J says its lung cancer drug combination keeps people alive longer

The US gov's monthly auction of 10-year notes drew the highest yield since 2007 after the latest economic data suggesting that the Federal Reserve is less likely to cut interest-rates again before mid-year.  The $39B auction was awarded at 4.68%, slightly higher than indicated by its level at the bidding deadline.  Yields across maturities had risen by several basis points after gauges of service-sector activity & job openings were stronger than expected.  The data “reinforced the market's view on a strong US economy & rates are not restrictive,” said Tracy Chen, a portfolio manager at Brandywine Global Investment Management.  Traders, who as recently as late Sep were fully pricing in another Fed rate cut by Mah, scrapped wagers there will be one until the 2nd ½ of the year.  “There’s still concern about elevated inflation risks that has created more of a term premium, there’s concern about these budget deficits needing to be financed, and there’s been a shift from last year that’s leading to more of a focus now on a soft landing — or no landing — as opposed to a hard landing,” said Michael Cloherty, head of US rates strategy at UBS Securities.

Treasury auction draws highest yield since 2007 in bond sell-off

Gold prices trimmed earlier gains, trading below $2650 per ounce after a 1% rise earlier in the session.  The strengthening $ & rising Treasury yields pressured gold as US job openings indicated lower chances of significant rate cuts by the Federal Reserve.  Stronger-than-expected job openings & solid services sector data pointed to a resilient economy, likely keeping the Fed cautious about easing rates.  The $ rebounded from a 1-week low, further weighing on gold, which typically benefits from lower interest rates.  Investor concerns that proposed US tariffs could fuel inflation & restrict the Fed's rate-cutting ability have also impacted gold's appeal as a non-yielding asset.  Traders now await key US jobs data & the Fed's meeting minutes for more policy guidance.  Meanwhile, China's central bank boosted its gold reserves for the 2nd consecutive month, lending support to gold prices.

Gold Prices Trim Gains, Dip Below $2,650 as Dollar Strengthens

Oil prices edged lower as optimism over demand faded, although tighter Russian & Iranian supplies driven by expanded Western sanctions curbed losses.  Brent crude futures were down 25¢ at $76.05 a barrel while US West Texas Intermediate (WTI) crude was down 44¢ (0.6%) at $73.12.  Both benchmarks fell yesterday, after rising for 5 straight days last week & ending at their highest levels since Oct on Fri amid expectations of more fiscal stimulus to revitalize China's faltering economy.  This week's weakness is likely a technical correction, as traders react to weaker global economic data that dented the optimism seen earlier.  That referred to weak economic news from the US & Germany.  Higher inflation in Germany has raised concerns that the ECB may not be able to cut rates as quickly as expected across the eurozone, while US manufacturing orders fell in Nov.  Market participants are looking to more data this week, such as the Dec non-farm payrolls report on Fri, for clues on US interest rate policy & the outlook for oil demand.  Meanwhile, cold weather in the US & Europe has boosted demand for heating oil, supporting prices.  Meteorologists expect the weather in the lower 48 US states to remain colder than usual thru Jan 21, with the coldest days expected later this week.

Oil prices rise on supply disruption concerns

Stocks reversed early gains as cautious investors weighed new economic data.  At the same time the 10-year Treasury yield added roughly 7 basis points to hover just below 4.7%.  Bets on when the Federal Reserve will next cut interest rates were pushed back too.  Earlier today, the Institute for Supply Management's manufacturing PMI indicated the manufacturing sector continued to expand last month, although the prices paid index jumped to a nearly 2-year high.  The surge in prices for the Fed is a worry for investors.

Markets hesitate after new economic data and higher Treasury yields

Dow recovered 87, decliners over advancers 4-3 but NAZ was off 213. The MLP index stayed near 300 & the REIT index fell 1+ to the 392s.  Junk bond funds slid lower & Treasuries saw more selling, raising yields (more below).  Oil rose, going over 74, & gold added 14 to 2662.

Dow Jones Industrials

Online spending rose 8.7% during the holiday season from last year, according to data from Adobe Analytics, as deals & the use of AI-powered chatbots helped inspire purchases.  Sales on retailers' websites & apps totaled $241B from Nov 1 - Dec 31.  The company's analysis includes more than 1T visits to US retail sites, 100M unique items & 18 different product categories.  More demand, not higher prices, drove higher online spending.  Adobe's Digital Price Index found e-commerce prices have fallen every month for 27 months.  The company's figures are not adjusted for inflation, but if they were revised, overall consumer spending would be higher.  The e-commerce results are a promising sign for the retail industry, which has yet to report company-specific sales.  Other early reads on the holiday season have looked strong, too.  Retail sales for the holiday season in the US, excluding automotive sales, rose 3.8% year over year for the period of Nov 1 - Dec 24, according to Mastercard SpendingPulse, which measures in-store & online sales across payment types.  Deep discounts motivated holiday shoppers to spend, according to Adobe’s data.  For every 1% drop in the typical price, demand for merchandise increased by about 1% compared with the 2023 holiday season.  That led to an additional $2.25B in online spending.  Vivek Pandya, lead analyst for Adobe Digital Insights, said as prices of groceries & housing remain elevated, consumers are waiting to buy nonessential goods at times of the year when they expect to pay less.  He described that pattern as “event-ized buying.”  For example, he said shoppers have opened their wallets during Amazon's Prime Day event in the summer or during sales days such as President's Day & Memorial Day.  “There are certain moments and certain opportunities where we see them overindexing their spend, really driving forward, because they see the value,” he added.  “And then outside of those periods, we start to see growth kind of draw back down.”

Online holiday spending rises nearly 9%, fueled by deals and AI chatbots, Adobe data says

Treasury yields rose after economic data suggested services inflation is proving hard to tame.  The 10-year Treasury yield climbed 6 basis points at 4.677% & the 2-year Treasury yield gained 3 basis points 4.299%.  Yields & prices move in opposite directions & 1 basis point equals 0.01%.  The moves came after the Dec ISM services price index came in at 64.4, up from 58.2 in Nov.  Meanwhile, the Job Openings & Labor Turnover Survey (JOLTS) showed a higher-than-expected number of openings.  The combination of rising prices & a high level of job openings could cause traders to dial back expectations for Federal Reserve rate cuts in 2025.  ADP's private payrolls report will follow tomorrow is forecast to show that 130K jobs were added in Dec, before the Dec jobs report from the Bureau of Labor Statistics is expected Fri.  That will include nonfarm payrolls data as well as the unemployment rate in the US.

10-year Treasury yield jumps after economic data points to sticky inflation

Job openings rose more than economists expected in Nov, but other signs of cooling in the labor market emerged as fewer Americans left their jobs & hiring continued to slow.  New data from the Bureau of Labor Statistics showed there were 8.1M jobs open at the end of Nov, an increase from the 7.8M seen in Oct.  The Oct figure was revised higher from the 7.7M open jobs initially reported.  The forecast had expected the report to show 7.74M openings in Nov.  The Job Openings & Labor Turnover Survey (JOLTS) also showed 5.3M hires were made during the month, down from the 5.4M made during Oct.  The hiring rate fell to 3.3% from the 3.4% seen in Oct.  Also, the quits rate, a sign of confidence among workers, fell to 1.9% from 2.1% in Oct.  Oxford Economics lead US economist Nancy Vanden Houten described the release as consistent with a "no hire, no fire" labor market.  The quits rate & hiring rate are now lower than they were before pandemic.  These signs of slowing in the labor market have prompted Fed Chair Jerome Powell to describe the labor market as "looser than pre-pandemic."  But he also noted that, for now, the labor market is cooling in a "gradual and orderly way."  "We don’t think we need further cooling in the labor market to get inflation down to 2%," Powell said.

Job openings higher as hiring, quitting rates drop

Stocks reversed early gains as cautious investors weighed new economic data.  Meanwhile, 10-year Treasury yield added roughly 7 basis points to hover just below 4.7%.  Bets on when the Federal Reserve will next cut interest rates were pushed back, too.  The Institute for Supply Management's manufacturing PMI indicated the manufacturing sector continued to expand last month, although the prices paid index jumped to a nearly 2-year high of 64.4, up from the prior 58.2.  The surge in prices "is a worry for the Fed as it is consistent with PCE supercore inflation remaining at 3.5% until the middle of next year," wrote Capital Economics North America economist Thomas Ryan.

Markets slip lower on fears about higher yields and future inflation

Dow finished down 25 (substantially below early trading) & decliners ahead of advancers 4-3 but NAZ rose 243.  The MLP index was fractionally higher above 300 & the REIT index pulled back 6 to the 393s.  Junk bond funds hardly budged & Treasuries continued weak which brought higher yields.  Oil saw selling in the PM, taking it lower in the 73s, & gold dropped 9 to 2645 (more on both below).

Dow Jones Industrials 

McDonald's (MCD), a Dow stock & Dividend Aristocrat, is hoping for a fresh start in 2025 following a year in which its stock underperformed under the weight of lackluster sales & an E coli outbreak.  Enter its new national value platform, McValue, for some course correction.  It includes a $5 meal deal that launched last Jun, which led to a slight boost in foot traffic but was later disrupted by the E coli outbreak that began in Oct.  It also has a buy 1, add 1 for $1 option.  Lastly, there will be local deals & in-app exclusives.  All US locations will begin offering the McValue platform starting tomorrow.  The launch day has been months in the making, MCD's owner & operator John Palmaccio said.  He serves as the Operator's National Advertising Fund Chair & owns 30 MCD's in South Carolina & Georgia.  "We took the time to get it right, working closely with the company to review consumer and deal performance data and make sure the McValue business case was solid,” Palmaccio said.  MCD stock fell 2.50.

McDonald's to launch national McValue menu as it looks for a boost

Deere & Co (DE) strengthened its bet on autonomous machinery by unveiling new tractors & industrial equipment, capable of operating without the need for a human being in the cab, at the CES trade show in Las Vegas.  The world's largest farm equipment maker is making strides towards automating manual work amid a shortage of skilled workers & high labor costs.  In the agricultural sector, the challenge of finding workers to operate tractors has been a persistent issue & has been worsened by the pandemic.  "Our agriculture, construction and commercial landscaping customers all have work that must get done at certain times of the day and year, yet there is not enough available and skilled labor to do the work," DE chief technology officer Jahmy Hindman said. The company revealed the 2nd generation of its autonomy kit, which combines advanced computer vision, AI & cameras to help machines navigate terrains.  DE & other equipment makers have invested heavily in technology to automate off-highway vehicles such as farm tractors and mining vehicles.  The stock fell 3.15.

Deere boosts bet on autonomous tractors with new machines

Disney (DIS), a Dow stock will combine its Hulu + Live TV business with sports streamer FuboTV (FUBO) in the first major media dealmaking move of 2025.  DIS will control 70% of FUBO & shareholders of the sports streamer will own the remaining 30% of the combined business, which will operate under the Fubo publicly traded company name.  In conjunction with the transaction, FUBO with DIS, Fox (FOX) & Warner Bros Discovery (WBD) related to Venu Sports, the planned sports streaming platform previously announced by the trio.  The combination of the 2 businesses will form one of the largest digital pay-TV providers as consumers search for cable alternatives amid increased cord-cutting.  FUBO, which offers users access to live TV channels over the internet, has primarily focused on sports & news.  Hulu + Live TV, categorized as a cable replacement option, similar to YouTube TV, allows users to stream from about 100 live TV channels across sports, news & entertainment.  FUBO said the combined company is expected to "become immediately cash flow positive," with over 6.2M subscribers in North America & over $6B in revenue.  "We are delighted by today's outcomes," said David Gandler, co-founder & CEO of FUBO, who will also run the new business.  "Increased scale means we have the flexibility to pursue diverse growth strategies, opening up a range of opportunities, both domestically and internationally."  DIS stock inched slid 15¢ & FUBO stock soared 3.59 to 5.06.

Disney to combine Hulu + Live TV with FuboTV

Gold prices fell as Treasury yields rose, while the Federal Reserve's recent hint at a slower pace of rate cuts in 2025 kept investors keenly awaiting a slew of economic data due this week to shed more light on that view.  Spot gold  fell 0.3% to $2632 per ounce & US gold futures were down 0.4% at $2644.  Bond yields are back up again, placing pressure on gold.  Yield on the 10-year US Treasury Note rose to an over 1-week high, making non-yielding gold less attractive.  The Fed's latest projections in Dec implied a shift to a more cautious pace of rate cuts this year, with the majority of the policymakers expressing concern that inflation could reignite.  The central bank may need to keep rates higher for longer to address persistent inflation, which remains above its 2% target.  Pres-elect Trump takes office on Jan 20 & his proposed tariffs & protectionist policies can stoke further inflation.

Gold prices dip as yields rise, market girds for US economic data

Oil prices fell amid a stronger $ ahead of key economic data by the Federal Reserve US payrolls data later in the week.  Brent crude futures were down 28¢, at $76.23 a barrel after closing at their highest since Oct 14 on Fri.  US West Texas Intermediate crude futures were down 27¢ at $73.69 a barrel after closing at their highest since Oct 11 on Fri.  Crude prices posted gains in the previous 5 sessions on hopes of improved demand following cold weather in the Northern Hemisphere& more fiscal stimulus by China to revitalize its battered economy.  The $'s ​​strength, however, is a concern for investors.  The $ held near a 2-year high today.  A stronger $ makes $-priced commodities more expensive.   Investors are also looking to economic news for further clues on the outlook for Federal Reserve interest rates & energy consumption.

Oil prices plunge from record highs as dollar strengthens

There has not been a lot of excitement in the stock market lately, so investors are looking for problems.  Treasury yields have been strong recently & worries about higher yields bother nervous investors.  When Trump becomes Pres on Jan 20, there will be more information about the path for interest rates.  Then the Fed will hold its next meeting.

Markets climb led by chip stocks

Dow rebounded 317, advancers over decliners 4-3 & NAZ recovered 376.  The MLP index went up 1+ to the 301s & the REIT index was off 1+ to the 398s.  Junk bond funds slid lower & Treasuries had limited selling which lifted yields slightly.  Oil edged over 74 & gold fell 7 to 2647.

Dow Jones Industrials

Lucid (LCID) reported record quarterly vehicle deliveries for the 4th qtr & confirmed production of more than 9K vehicles in 2024, meeting a previously announced target.  The electric vehicle manufacturer reported production of 9K units & deliveries of 10K cars in 2024. That included production of 3386 units & delivery of 3099 vehicles during the 4th qtr.  Last year's results represented a 71% increase in deliveries & 7% uptick in production compared with 2023.  However, such increases have not transcended to better investments for investors.  The stock declined by roughly 28% last year, as EV adoption has been slower than expected & the company has burned thru Bs of $s in cash as it discounted some models & prepares to launch a new SUV.  Its sole product is the Air sedan, which it began delivering in late 2021.  Since then, the market has grown more competitive & the company has not scaled as quickly as it previously anticipated.  The stock went up 13¢ (4%).

Lucid reports record quarterly vehicle deliveries, meets production target

Amazon's (AMZN) Ring is partnering with fire safety product maker Kidde to launch a connected smoke alarm, the company announced at the Consumer Electronics Show in Las Vegas.  The companies plan to launch Kidde smoke & carbon monoxide alarms that integrate Ring's home security technology & can deliver alerts to the Ring mobile app. The Kidde Smart Smoke Alarm with Ring will cost $54.97, while the Kidde Smart Smoke & CO Alarm with Ring will cost $74.97.  Both products will ship in Apr.  As part of the launch, Ring will also roll out a $5-per-month subscription service that gives users access to round-the-clock professional monitoring & emergency dispatchers.  AMZN acquired Ring in 2015 for a reported $1B.  The home security company is primarily known for its video doorbell devices, which allow users to record activity in front of their homes, though it has expanded to include a portfolio of products ranging from camera-equipped floodlights to flying security camera drones.  Users aren't required to subscribe to Ring Home, the company's program that enables video recording storage & other security features, in order to access the new smoke alarm service.  The stock rose 3.77.

Amazon’s Ring announces smart smoke alarm as CES tech palooza kicks off

New orders for US-manufactured goods fell in Nov while business spending on equipment appeared to have slowed in the 4th qtr, govt data showed.   Factory orders dropped 0.4% after an upwardly revised 0.5% gain in Oct, the Commerce Dept's Census Bureau reported.  The forecast had expected factory orders slipping 0.3% after a previously reported 0.2% rise in Oct.  Factory orders edged up 0.1% year-on-year in Nov.  Manufacturing, which accounts for 10.3% of the economy, has struggled in the aftermath of the Federal Reserve's aggressive monetary policy tightening in 2022 &  2023 to curb inflation.  A recovery is likely this year as the central bank cuts interest rates, which was underscored by an Institute for Supply Management survey last week showing its Purchasing Managers Index rising to a 9-month high in Dec.  Factory production rebounded after contracting for months, the survey showed.

US factory orders fall in November

Stocks popped as chip names shone & investors waited for the release of the key monthly jobs report later in the week.  The upbeat mood kicks off the first full week of 2025 for traders, highlighted by the release of the Dec nonfarm-payrolls report on Fri.  But it's another shortened week, as stock markets shutter on Thurs to mourn the death of former Pres Jimmy Carter.

Markets climb although were a little lower in the shortened week

Dow shot up 339, advancers over decliners 3-1 & NAZ advanced 340.  The MLP index remained in the 299s & the REIT index rose to the 399s.  Junk bond funds continnued mixed & Treasuries had limited selling, allowing yields to ease higher.  Oil was up about 1 to 74 from buying into the close & gold slid back 15 to 2653 (more on both below).

Dow Jones Industrials 

Microsoft (MSFT), a Dow stock, plans to spend $80B in fiscal 2025 on the construction of data centers that can handle artificial intelligence workloads, the company said.  Over ½ of the expected AI infrastructure spending will take place in the US,  Vice Chair & Pres Brad Smith wrote.  Its  fiscal year ends in Jun.  “Today, the United States leads the global AI race thanks to the investment of private capital and innovations by American companies of all sizes, from dynamic start-ups to well-established enterprises,” Smith said.  “At Microsoft, we’ve seen this firsthand through our partnership with OpenAI, from rising firms such as Anthropic and xAI, and our own AI-enabled software platforms and applications.”  Several top-tier technology companies are rushing to spend Bs on graphics processing units for training & running AI models.  The fast spread of OpenAI’s ChatGPT assistant, which launched in late 2022, kicked off the AI race for companies to deliver their own generative AI capabilities.  Having invested over $13B in OpenAI, MSFT provides cloud infrastructure to the startup & has incorporated the startup’s models into Windows, Teams & other products.  MSFT reported $20B in capital expenditures & assets acquired under finance leases worldwide, with $14.9B spent on property & equipment, in the first qtr of fiscal 2025.  Capital expenditures will increase sequentially in the fiscal 2nd qtr, CFO Amy Hood said in Oct.  The stock fell 94¢.

Microsoft expects to spend $80 billion on AI-enabled data centers in fiscal 2025

Despite the lingering uncertainty around what’s coming for the US as Pres-elect Donald Trump takes office & works to enact his campaign proposals, Richmond Fed PresTom Barkin has an upbeat outlook on the economy for the year ahead.  In remarks Barkin said that his baseline expectation for 2025 is positive.  “With what we know today, I expect more upside than downside in terms of growth,” Barkin said, adding that expectations for economic expansion are likely behind a recent uptick in business optimism.  Barkin said his sunny outlook is based, in part, on the fact that he believes the momentum around consumer spending will likely keep economic growth healthy in the coming months.  Consumer spending makes up nearly 70% of GDP growth.  As long as Americans can keep their jobs & asset values remain solid, Barkin believes they will continue to spend.  “With business optimism so high and labor supply unlikely to continue to grow so robustly, it feels like the current labor market equilibrium is more likely to break toward hiring than toward firing,” Barkin added.  Of course, some sectors will likely fare better than others.  In his district, for example, there are concerns about the outlook for the federal workforce.  In addition to solid economic growth, Barkin also predicts that the more cost-conscious consumer that has emerged in recent months will put pressure on companies to limit price increases, which should continue to push inflation down.  “Overall, that would be a good outcome for the U.S. economy,” Barkin said.

Richmond Fed’s Barkin Sees More Blue Skies Ahead for Economy

The US surgeon general issued a new advisory warning about the link between alcohol consumption & increased cancer risk, & pushed for policy changes to help reduce the number of alcohol-related cancers.  Surgeon General Dr Vivek Murthy said there is a “well-established” link between drinking alcohol & at least 7 types of cancer, including breast, colorectum, esophagus & liver.  For cancers including breast, mouth & throat cancers, increased risk may start around 1 or fewer drinks per day, according to his office.  As part of the advisory, the surgeon general called for policy changes that could help reduce alcohol-related cancer.  He pushed for alcohol labels to be more visible & include a warning about the increased risk of cancer, to reassess recommended limits for alcohol consumption based on the latest research & expand education to increase general awareness that alcohol consumption increases cancer risk.  The efforts outlined in the advisory are similar to those already implemented to lessen tobacco use, including a slew of mandated warnings on packaging & in stores.  The surgeon general advised people to consider the link between alcohol consumption & greater cancer risk when deciding whether to drink or how much to have.  Alcohol consumption is the 3rd leading preventable cause of cancer in the US, behind only tobacco & obesity.  “Alcohol is a well-established, preventable cause of cancer responsible for about 100,000 cases of cancer and 20,000 cancer deaths annually in the United States — greater than the 13,500 alcohol-associated traffic crash fatalities per year in the U.S. — yet the majority of Americans are unaware of this risk,” Murthy said.  According to the advisory, 72% of US adults said they had 1 or more drinks per week between 2019 & 2020, but less than ½ of all adults are aware of the link between drinking & cancer risk.  Worldwide, 741K cases of cancer were attributed to alcohol consumption in 2020.

U.S. surgeon general calls for cancer risk warnings on alcohol labels

Gold prices retreated from a 3-week high, pressured by a robust $, while markets braced for potential economic & trade shifts under Pres-elect Donald Trump.  Spot gold eased to $2649 an ounce, after hitting its highest level since Dec 13.  Bullion is up about 1.1% for the week.  US gold futures were down 0.2% at $2663.  The new pres's agenda that supports higher tariffs has boosted the $ & created significant underlying pressure on metal markets.  The dollar index was set for its strongest weekly performance since mid-Nov, making gold pricier for overseas buyers.  For most of the metals, the slowing of global trade has typically been coupled with a slowing economy & therefore slowing demand for metals (referring to the potential impact of Trump's proposed trade tariffs).  A headwind from a stronger $ is likely to persist for gold, but it looks like debts will continue rising in the US & other countries & geopolitical issues aren't going to end soon, so it should stay supported.  Trump is set to take the oath of office on Jan 20 & his proposed tariffs & protectionist policies are expected to fuel inflation.  This could slow the Federal Reserve's interest rate cuts, limiting gold's upside.  After 3 rate cuts in 2024, the Fed projects only 2 reductions in 2025 due to persistent inflation.  Gold, which thrives in low-rate environments, is currently benefiting from seasonal demand.

Gold slips from three-week high as strong dollar weighs

Oil prices were little changed after closing at their highest in more than 2 months in the previous session, amid hopes that govs around the world could step up policy support to revive economic growth that would boost fuel demand.  Brent crude futures edged up 1¢ to $75.94 a barrel after settling at their highest since Oct 25 yesterday.  West Texas Intermediate crude also rose 1¢ to $73.14 a barrel, with yesterday's settlement the highest since Oct 14.  Both contracts were on track for a 2nd weekly gain after investors returned from holidays, boosting trading liquidity.  Factory activity in Asia, Europe & the US ended 2024 on a weak note as expectations for the New Year soured on rising trade risks from Donald Trump's return to the presidency & China's fragile economic recovery.  Dec PMIs for Asia were mixed, & manufacturing activity & GDP growth in the region is expected to remain subdued in the near term.  With growth expected to be difficult & inflation below target in most countries, central banks in Asia should continue to ease policy.  Lower interest rates would spur greater economic growth & would likely lead to higher fuel consumption.  Investors are eyeing further interest rate cuts by the Federal Reserve this year to support the US economy, while Chinese Pres Xi Jinping has promised more proactive policies to boost growth.

Oil Set for Weekly Gain; Focus on U.S., China Policy

Stocks went higher, shaking off a downbeat start to 2025.  After a 5-session losing streak, the longest since Apr, the popular stock averages ended the holiday-shortened week with modest losses.  Dow declined 260 last week.  Stocks markets will close on Thurs to remember former Pres Carter.

Markets are higher although weekly losses loom

Dow rose 247, advancers over decliners about 5-2 & NAZ gained 188.  The MLP index was up 2 to 301 & the REIT index recovered 2+ to the 297s.  Junk bond funds were mixed & Treasuries were flattish which kept rates about even.  Oil traded higher in the 73s & gold fell 9 to 2659.

Dow Jones Industrials

Rivian Automotive's (RIVN) 2024 vehicle production & deliveries were in line with the company's previously announced expectations.  The electric vehicle maker produced 49K vehicles last year, including 12,727 trucks & vans during the 4th qtr & delivered 51K vehicles, including 14K models during the last 3 months of the year.  In Oct it lowered its 2024 production target to a range of 47-49K vehicles, down from 57K units.  The company had expected deliveries of 50-52K vehicles.  The company in Oct said the adjusted target was because of a “production disruption due to a shortage of a shared component” for its current vehicles — the R1T pickup, R1S SUV & a commercial delivery van.  The company said the previously discussed shortage “is no longer a constraint on Rivian’s production.”  The stock jumped 2.83 (21%).

Rivian meets its 2024 vehicle production target after lowering projections

Ford's (F) U.S. new vehicle sales increased 4.2% last year to represent the automaker's best year since 2019, led by increased sales of hybrid & all-electric models.  The Detroit automaker reported 2024 sales of 2.08M vehicles, up from just under 2M in 2023.  In 2019, the automaker sold 2.4M vehicles in the US.  For the 4th qtr, the company reported an 8.8% year-over-year increase in sales to 531K vehicles sold.  Full-year sales of its vehicles with traditional internal combustion engines increased 0.2% compared to 2023, while sales of electrified vehicles increased 38.3% year over year.  Electrified vehicles, including hybrids & EVs, represented 13.7% of the automaker's total annual sales.  The stock went up 11¢.

Ford reports best annual U.S. sales since 2019

US manufacturing moved closer to recovery in Dec, with production rebounding & new orders rising further, though factories faced higher prices for inputs as the year ended.  The Institute for Supply Management (ISM) said that its manufacturing PMI increased to 49.3 last month, the highest reading since Mar, from 48.4 in Nov.  A PMI reading below 50 indicates contraction in the manufacturing sector, which accounts for 10.3% of the economy.   Dec was the 9th consecutive month that the PMI remained below the 50 threshold.  The forecast was for the PMI to be unchanged at 48.4.  Manufacturing was battered by the Federal Reserve's aggressive monetary policy tightening in 2022 & 2023 to tame inflation.  But sentiment surveys, including the PMI, have exaggerated the magnitude of the decline in factory production.  Gov data last month showed manufacturing growing at a 3.2% annualized rate in the 3rd qtr & contributing to the economy's 3.1% expansion pace during that period.  The central bank is cutting interest rates, lowering its benchmark overnight interest rate by 25 basis points to 4.25%-4.50% last month.  It was the 3rd consecutive rate cut since the Fed started its easing cycle in Sep.

US manufacturing PMI rises to nine-month high in December

US stocks stepped higher today, looking to shake off a downbeat start to 2025 as Tesla (TSLA), up 3.3%, looked for a comeback.  But hopes are dim for a Santa Claus rally after benchmarks fell again yesterday to notch a 5-session losing streak, the longest since Apr.

Markets waver while investors hope for a new year comeback

Dow declined 151, advancers were modestly ahead of decliners & NAZ was off 30.  The MLP index gained 2+ to 297 & the REIT index fell 3+ to the 394s.  Junk bond funds saw modest purchasing & Treasuries trended sideways so yields hardly budged.  Oil remained in demand, up 1+ to the 73s, on stronger demand outlook & gold roared ahead 27 to 2668 (more on both below).

Dow Jones Industrials 

Mortgage rates are up for a 3rd straight week to the highest since Jul, further hindering demand in the already-stagnant housing market.  Freddie Mac's latest Primary Mortgage Market Survey showed that the average rate on the benchmark 30-year fixed mortgage jumped to 6.91%, up from last week's reading of 6.85%.  The average rate on a 30-year loan was 6.62% a year ago.  "Inching up to just shy of seven percent, mortgage rates reached their highest point in nearly six months," said Sam Khater, Freddie Mac’s chief economist.  "Compared to this time last year, rates are elevated and the market’s affordability headwinds persist."  The average rate on the 15-year fixed mortgage climbed to 6.13% from 6.0% last week.  1 year ago, the rate on the 15-year fixed note averaged 5.89%.

Mortgage rates kick off 2025 with an increase, nearing 7%

Weekly unemployment claims hit their lowest level since Apr during the final full week of 2024.  In  the latest sign that layoffs remain low, data from the showed 211K initial jobless claims filed last week were down from 220K the week prior & below the 221K estimate.  Meanwhile, 1.84M continuing claims were filed, down from the 1.89M seen the week prior.  Economists largely believe the continued low number of weekly jobless claims combined with relatively steady continuing claims reflects a low hire, low fire type of labor market.  The holidays could've impacted the recent claims numbers.  But zooming out, this data falls in line with the recent trend that the labor market deterioration remains gradual.  With the unemployment rate moving higher throughout most of 2024 & monthly job gains slowing, the labor market is ending the year having cooled from where it started.  The hiring rate fell from 3.7% at the end of 2023 to 3.3% at the end of 2024, further showing that while Americans aren't losing their jobs, it's becoming increasingly harder to find them too.

Jobless claims hit 8-month low as 'low hire, low fire' market persists

Apple (AAPL), a Dow stock, is offering discounts on its top-end iPhones & other products in China for the upcoming Chinese New Year as the tech giant faces heightened competition in 1 of its most crucial markets.  The Cupertino giant is giving customers 500 Chinese yuan ($68.50) off of the iPhone 16 Pro or iPhone 16 Pro Max, & 400 yuan off the iPhone 16 or iPhone 16 Plus.  Offers also include discounts for the iPhone 14 & iPhone 15.  For a long time AAPL has resisted offering discounts thru its own retail channels.  Instead, 3rd-party retailers would offer deals at certain times of the year.  However, as competition ramps up, AAPL has been more inclined in the last year to post seasonal deals.  AAPL offered a similar Chinese New Year deal last year & in May, the company offered hefty discounts as part of China’s 618 shopping festival.  The firm's latest challenge has come from a resurgent Huawei & other domestic brands.  Its smartphone shipments fell 6% year-on-year in mainland China in the 3rd qtr of 2024, according to Canalys & the company's market share also slipped to 14% from 16% a year earlier.  AAPL stock fell 6.57 (3%).

Apple offers holiday discount in China as Huawei competition heats up

Gold prices extended gains near $2650 in the North American open after the New Year holiday.  The precious metal gained as its appeal as a safe-haven asset increased, with investors focused on Pres-elect Donald Trump taking office on Jan 20.  Trump's expected incoming policies, such as higher import tariffs & lower taxes, would be a boon for Gold.  Higher import tariffs would lead to a potential global trade war & lower taxes would increase inflationary pressures in the US.  Gold tends to outperform amid economic uncertainty as a safe-haven bet & higher price pressures, given that investors use the precious metal as a hedge against inflation.  The 10-year US Treasury yield fell near 4.54% earlier in the year as its rally stalled.  In general, lower yields on interest-bearing assets result in lower opportunity costs for non-yielding assets, such as gold, making them attractive bets.

Gold surges near $2,650 as investors weigh Trump's impact on global economy

Oil prices edged higher, the first trading day for 2025, as investors returning from holidays cautiously eyed China's economy & fuel demand following Pres Xi Jinping's pledge to boost growth.  Brent crude futures were up 16¢ at $74.80 a barrel after closing up 65¢ on Tues, the last trading day for 2024.  US West Texas Intermediate crude futures were up 16¢ at $71.88 a barrel after closing up 73¢ in the previous session.  Xi said Tues in his New Year's speech that the country will implement more proactive policies to boost growth by 2025.  China's factory activity grew in Dec, a Caixin/S&P Global private sector survey showed, but at a slower pace than expected amid concerns over the trade outlook & risks from tariffs proposed by US Pres-elect Donald Trump.

Oil Prices Rise as Investors Return From Holidays

Stocks erased session gains today to kick off the first trading day of the new year as investors returned from holiday.  Markets were eyeing a comeback after a year-end slide to begin the week, but buyers were largely absent today.  Tesla (TSLA) shares slid almost 6% after the electric vehicle maker posted its first decline in annual deliveries, &, along with AAPL's fall (above), kept buyers away.

Markets rise cautiously to kick off 2025

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

Tesla (TSLA) posted its 4th-qtr vehicle production & deliveries report.  The key numbers are:

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.