Closing Recap

Monday, December 30, 2024

US equity futures continued to trend lower early and never really recovered following a soft day to end last week as the markets look into 2025 and face uncertainty in economic growth, tariffs, Fed moves and a Trump presidency. The move accelerated to the downside into the open with no economic data to provide direction and a low-volume day expected. Consistent with the early market action, today’s Fear and Greed Index dipped to 26/100 (Fear) from 34 (Fear) at the previous reading, 29 (Fear) a week ago and 67 (Greed) last month. Early breadth favored decliners by 7:2 as small caps underperformed with IWM (-1.47%) versus SPY (-1.30%) and QQQ (-1.39%). Sector wise, Energy (-0.40%), Utilities (-1.14%) and Real Estate (-1.32%) were outperformers among S&P sector ETFs, while Industrials (-1.62%), Materials (-1.64%) and Consumer Discretionary (-1.80%) led the underperformers with all 11 sectors declining.

In data of interest today, @bespokeinvest noted if the S&P 500 closes down 1%+ today, it will be the first time since at least 1952 that it had two 1%+ declines in the last five trading days of the year. That said, multiple sources, including @KobeissiLetter, referenced data noting the majority of market participants now expect higher stock prices over the next year. @Kobeissi also pointed out upcoming Tesla deliveries data, noting it is expected to report Q4 deliveries of 504,000 per @Kalshi. A number over 500,000 would be a new quarterly record. On a less bullish note, @Kalshi also highlighted US credit card defaults have reached the highest level since 2008, with $46B in delinquencies written off during the first nine months of 2024, the highest in 14 years and pushing the odds of recession next year to 23%.

Heading into the final hour of trading, equities were off early lows but remained in the red. Breadth still favored decliners but improved to almost 2:1 as small caps flipped to outperforming with IWM (-0.54%) versus SPY (-0.70%) and QQQ (-0.81%). Among S&P sector ETFs, Energy had pushed slightly into green territory with XLE +0.04% while the remainder of the groups remained red. Materials (XLB, -1.25%) and Health Care (XLV, -1.14%) led the decliners. Both growth and value slipped with growth outperforming slightly.

• US Pending Home Sales Mo/Mo +2.2% vs forecast +0.8% and prior +2.0%.
• Dallas Fed Manufacturing Business Index +3.4 versus forecast -3 and prior -2.7.

• February WTI crude futures gained early and held on to settle higher by $0.39/bbl, or +0.55%, to $70.99. Natgas enjoyed a big move higher ahead of a polar vortex cold front in the US, colder temps in Europe and the coming expiration of Russian LNG transit deal through Ukraine, and was at least partially responsible for pulling oil higher. Brent similarly gained $0.22/bbl, or +0.30%, to $74.39.

• OLLI Shares of the closeout chain surrendered some of its recent gains after news late Friday that not all of the Big Lots (BIGGQ) stores will be closing as was previously understood. Gordon Brothers stepped in with a late strategic deal on Friday.
• TSCO Tractor Supply Closes Acquisition of Allivet, a Leading Online Pet and Animal Pharmacy; the acquisition expands retailer’s addressable market by $15B; Provides $1B revenue opportunity at full scale.

• SEAT Saw its shares rally after Bloomberg reported that the online ticket marketplace is noted to explore a sale after receiving takeover interest, according to people with knowledge of the matter

• GPRK Geopark Ltd said they were unable to proceed with CPO-9 block acquisition after Ecopetrol, the operator of the CPO-9 block, has exercised its preemptive rights under the terms of the Joint Operating Agreement to acquire 100% of Repsol Colombia O&G Limited, which owns a 45% non-operated working interest in the CPO-9 Block

• AXSM Axsome Therapeutics shares fell following a pre-mkt PR announcing a successful completion and results of Phase 3 clinical program of axs-05 in Alzheimer’s disease agitation.
• PGEN Shares rose after Precigen Completed Submission of BLA with Request for Priority Review to the FDA for PRGN-2012 for the Treatment of Adults with Recurrent Respiratory Papillomatosis.
• TRAW Shares fell sharply after Traws Pharma, Inc. announced financing up to $72.6M from leading healthcare institutional investors to advance tivoxavir marboxil development for H5N1 bird flu to approval.
• CTKB Cytek Biosciences, Inc. announced that its Board of Directors has approved a stock repurchase program for up to an additional aggregate of $50M of its common stock.
• DCTH Delcath systems announces additional $16.3M in funding from series e and e1 warrant exercises.
• AMLX Amylyx and Gubra Join Forces for Peptide Drug Discovery Collaboration per a pre-mkt announcement.

• ERJ Embraer announced a firm order from an undisclosed customer for six A-29 Super Tucano light attack and advanced training aircraft. This order will be included in the 4Q24 backlog and deliveries are expected to occur in 2026.
• ACHR Shares of the eVTOL company fell after a large slate of shares became available for issuance, doubling the previous amount.

• VVX V2X announces award of $170M contract to continue support of DEA fleet.
• KULR AnnounceD active collaboration with U.S. Army to evaluate vibration reduction on AH-64E and UH-60 helicopter platforms.
• AMTM Shares of the defense company were higher after a Buy recommendation by independent research shop Aurelius Value.

• ADM In a December 29 post on LinkedIn, Hartwig Fuchs, the former CEO of an ADM division, calls for the replacement of ADM’s CEO.

• VEON shares rose after the co. announced a partnership with Starlink to bring Starlink direct-to-cell satellite connectivity to Kyivstar customers.
• HCP IBM IBM’s Planned $6.4 Billion HashiCorp Takeover Faces U.K. Antitrust Scrutiny. The initial review comes as the cloud sector is under increased scrutiny from competition regulators.
• LVO LiveOne announced today that it has reached a milestone of 450,000+ Tesla users.
• GTN Gray Television announced that it has entered into agreements with DIS that extends and renews the network affiliations for all of Gray’s ABC affiliated television stations across 25 markets through December 31, 2028

• NA Nano labs subsidiary nano bit to launch bitcoin business, advancing global innovation strategy.
• NVDA ByteDance continues to use Nvidia’s most advanced artificial intelligence chips despite U.S. efforts to block Chinese companies from using them. ByteDance planned to spend $7b on Nvidia chips next year. Per The Information.