(Justin Vaughn, Editor, Options Trading Report)
Friday’s market perked up, maybe Santa stuck around? After five days of roller-coaster indexes, the market came alive, with all three indexes on an upward track. The S&P 500 had the best day in nearly a month, up 1.8%. The lethargic Dow Jones Industrial Average surged 340 points, up 0.8%. The tech-loaded Nasdaq Composite was up 1.8% as the shortened week closed on a positive note. Stockholders, analysts, economists and sideliners are all somewhat concerned about high valuations in several sectors, namely the technology stocks, chips, and stocks associated with AI. They have blazed higher and many have outdistanced earnings per share with higher valuations. Some investors and traders are becoming ’gun-shy,’ yet the bull continues. The 10-year Treasury yield inched up finishing Friday at 4.596%. Oil was steady at $73.34 while Brent-crude leveled at $76.11 per barrel.
Chip stocks ruled the market opening Monday, extending a strong day last Friday. Strong interest in chips needed to support power for artificial intelligence, spurred the high-tech market and pushed the Nasdaq Composite upward, up 1.2% for the day, recording the best opening for the index since 2009. The S&P 500 was moderately higher, up 0.6%. The stubborn Dow Jones was sluggish, closing just below flatline. Continued comments by President-elect Trump have heavily influenced the market with fluctuations: a good example being a report by the Washington Post that “Trump’s aides are exploring plans to apply tariffs on critical imports only, instead of 25% on all imports.” Investors alike interpreted that comment to be positive. The 30-year Treasury bond yield was higher at 4.836% a closely watched number that is a key component to borrowing rates. Bitcoin came ‘alive’ trading over $102,000, recording strong buying. One of the largest bitcoin-buying companies, ‘MicroStrategy’ said it recently purchased 100 million of bitcoins now holding 447,000 bitcoins worth north of $44 billion. This week, the third shortened since Christmas week, will honor President Jimmy Carter’s passing, as the nation mourns, with the financial markets closed Thursday.
Tuesday’s market was down as the Nasdaq Composite dropped 375 points, off 1.9%, settling at 19489.68. The S&P 500 fell 1.1%, 66 points down and the Dow Jones Jones Industrial Average slid 178 points, all after a previous three-day run up. Treasury yields touched ‘record highs’ as selling was heavy, with investors worried that inflation was remaining ‘hard-to-control,’ and worried that there may not be cuts in the entire 2025 year. Wednesday’s trading was jumbled, as the S&P 500 churned a bit up along with the Dow Jones adding 107 points. The heavy tech Nasdaq slipped to near flatline. Bonds were ‘front-and-center’ according to Tradeweb, with the 10-year Treasury yield hitting 4.691% up from yesterday’s 4.684%. (“Yields, which rise when bond prices fall,” as quoted from the WSJ)
Will the Glitter of Gold continue to appreciate in 2025? 2024 was a ‘gold-year’ as the shiny metal was up a staggering 27%. More than just a hedge, more than a safe-haven, but a bona-fide ‘investment’ vehicle that never looked back, beating many asset classes. Early year buying by the Chinese began to drive prices, as central banks invested heavily both domestic and foreign. At nearly $2,000.00 an ounce at the start of the year, gold was consistently higher, peaking in October-November at a high of over $2,800.00 an ounce. The indexes were all up: with the Dow Jones Industrial Average finishing the year up 14%, the S&P 500 was up 24% and the heavy-tech Nasdaq Composite soaring a whopping 31%, as the Mag 7, and AI stocks overwhelmed the index. All along the steady-eddy gold was appreciating, finishing the year up to $2,652.70. Many large financials; such as JPMorgan Chase and Morgan-Stanley expect gold will have a run to over $3,000 an ounce with some predicting near $3,500 an ounce.
RUMBLINGS ON THE STREET
Josept Quinlan, chief market strategist for Merrill and Private Bank, Bank of America, and Lauren Sanfilippo, senior investment strategist at Bank of America, Barron’s – “Consumers drive the U.S. economy. They not only account for roughly 70% of GDP but also a staggering 31.5% of overall global personal consumption, according to figures from the U.N. Annual consumption levels in the U.S. are greater than the next six nations combined.”
Chris Marangi, co-chief investment officer of value at Gabelli Funds, Barron’s – “Steady jobs growth could lead to a ‘new Goldilochs–an environment where the economy is neither too hot nor too cold..”
Karthik Sankaran, Quincy Institute for Responsible Starecraft, Barron’s – “Dollar strength can be exacerbated by worries about the financial stability impact on the rest of the world [and] push more money into the dollar and into the U.S.”
David Uberti and Chelsey Dulaney, WSJ writers – “Holiday moo–ver. The December live–cattle trade paid off for its 20th year running, with futures contracts recently notching records. Talk about bullish.”