This week has not gotten off to a good start for the stock market, but some repair work is being attempted in the equity futures market that will send the cash indices higher at today’s open — the last open of 2024.
Currently, the S&P 500 futures are up 14 points and are trading 0.3% above fair value, the Nasdaq 100 futures are up 51 points and are trading 0.3% above fair value, and the Dow Jones Industrial Average futures are up 74 points and are trading 0.3% above fair value.
Sliding Treasury yields are helping in the repair work along with some rebound action in the mega-cap stocks and perhaps some New Year’s Eve spirit that is keeping the trading mood light.
The 2-yr note yield is down two basis points to 4.23%, leaving it down 10 basis points since the end of last week, and the 10-yr note yield is down three basis points to 4.52%, also leaving it down 10 basis points since the end of last week.
The S&P 500 for its part declined 1.1% yesterday, leaving it down 1.1% from its close on December 23 (and down 2.2% since December 24).
Market watchers are paying close attention to the market’s performance over the last five trading days of the year and the first two trading days of the new year. This is known as the Santa Claus Rally period, and it gets its name from the understanding that the market typically goes up (average gain of 1.3% since 1950) over that span. Notably, significant downturns have occurred (but not always) in years when the market declines over that seven-day stretch.
Today’s open then will get the market moving in Santa Claus’s direction, but there will be more work to get done over the remainder of the session and in the first two sessions of 2025 to avoid a Grinch-like twist on the heels of what will go down as a very good 2024 for the stock market.
The news flow continues to be light on market-moving information. Several markets of note (Japan, South Korea, Germany, Italy, and Switzerland) were closed today and several others (Hong Kong, UK, France, and Spain) were slated for early closes.
China, however, was open and it stirred some overnight disappointment with its weaker-than-expected December Manufacturing PMI. The latter checked in at 50.1, just barely above the expansion threshold of 50.0 but down from 50.3 in November. The Shanghai Composite declined 1.6%, yet there wasn’t any real spillover effect.
The U.S. market will be open for a full day of trading, although that doesn’t necessarily mean market participants will be giving it their full attention as New Year’s Eve plans beckon.
Thank you for your readership in 2024.
Happy New Year!
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Originally Posted December 31, 2024 – Some repair work as 2024 draws to a close
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