Closing Recap

Friday, December 27, 2024

The Santa Claus rally stalled to end the week! U.S. stocks were better for sale to end this holiday shortened week as market breadth negative by over a 5:1 margin decliners leading advancers, led by 2024 winners technology, communications, and consumer discretionary. Those sectors just happen to be the best performers in the S&P this month/and for the year so likely today’s selling was more a result of profit taking, though all eleven S&P sectors declined. Some of the biggest winners in the S&P 500 index this year (APP, TSLA, VST, etc.) were among the worst performers on Friday. Stock market news was very slow the last two days and Wall Street research also non-existent heading into the New Year. The US dollar and Treasury yields have rallied in recent weeks on the adjusted Fed rate cut outlook being less aggressive than markets had anticipated. Gold and Bitcoin prices also notable lower as risk appetite subsides to end the week. Despite today’s pullback, stocks finished off the lows and managed weekly gains for the S&P, Nasdaq and the Dow after a strong start to the week got the “Santa Claus” rally going.

December is coming to a close with only two trading days left after today and Smallcaps have seen the biggest declines as Bespoke Invest tweeted: “The small-cap Russell 2,000 ETF $IWM is on pace for its biggest monthly drop since September 2022. Dec. ’24: -8.2% vs. Sep. ’22: -10.1%”. The selling pressure has been broad based this month with more than 10% declines for Energy (XLE) and Materials (XLB) and over 8% declines for REITs (XLRE) and Utilities (XLU) followed by a 7% drop in Industrials (XLI). Only three sectors have performed well this month with Tech (XLK), Discretionary (XLY) and Communications (XLC) rising 9though all finished notable lower today).

• Strength in Treasury yields, with bonds down again as the 10y yield neared a test of its recent highs from Tuesday and yesterday (4.629%, 4.639% respectively, highest since early May) – last 4.617% from a close of 4.585% yesterday. The two-year note yield was last down 1.9 bps from late on Thursday at 4.311%. It had reached 4.341% in early morning trading (the 10-yr yield is up 46bps over the last 3-weeks and 100-bps since the September Fed meeting where they cut rates by 50bps). Gold prices fell -$22.00 to settle at $2,631.90 an ounce (down 2 straight weeks) and Bitcoin fell 1% to $94,500. So far this year, gold has surged 28%, hitting a record high of $2,790.15 on Oct. 31. The rally was fueled by the Federal Reserve rate-easing cycle and heightened global tensions.

• BNTX entered into a settlement agreement with the U.S. National Institutes of Health over the payment of royalties and other amounts related to its COVID-19 vaccine; said it would pay $791.5M to the U.S. agency as part of the settlement.
• CLW shares fell after Brazilian pulp maker Suzano said in a filing it had not reached any agreement nor made any decision regarding a deal with Clearwater Paper, after a news report saying Suzano was exploring an offer for the U.S. firm.
• DUK filed plan to recover estimated $1.1B in direct costs associated with response to hurricanes Debby, Helene & Milton
• FAST CFO said to resign effective in April.
• GDYN will be added to the S&P SmallCap 600 Index prior to the start of trading on Jan.2 as the company will replace Revelyst, which is being acquired by Strategic Value Partners.
• LW shares rose after Jana Partners tapped Jeffery DeLapp for a potential director candidate as the activist investor continues to seek changes at the company.
• NFLX said their Netflix NFL Christmas Gameday was a record-breaking day, as The Kansas City Chiefs’ victory over the Pittsburgh Steelers averaged 24.1 million viewers, while an average of 24.3 million people watched the Baltimore Ravens defeat the Houston Texans, with most of the audience coming via Netflix.
• UNH and AMED waived the right to terminate their merger agreement until a certain date, a filing showed on Friday; waiver includes that regulatory break fee under deal to be $275M, may escalate for failing to meet some timing milestones up to $325M.