2024 ending on a "whimper." Since 1928, weak final week = strong Jan 2025.

Equity markets are ending 2024 with a whimper. The S&P 500 has been down 4 of the 5 final trading days of 2024. Yet, equities are still finishing 2024 up 23%, making two back to back annual gains of 20% (2023 and 2024).

  • Notably, the S&P 500 had 4 consecutive declines in the final week of 2024.
    – since 1928, in the final week
    – there are 10 instances down 3 consecutive days
    – there are 3 instances down 4 consecutive days
  • For 3 consecutive declines, the forward returns are strong:
    – 3 consecutive declines
    – next 1M gain +3.6%, 80% win-ratio
    – next 12M gain +12.4%, 80% win-ratio
  • For 4 consecutive declines, 3 instances are:
    – 1946, 1966 and 2012
    – 1M gain: +2.4%, +7.8%, +5.0%, respectively
    – 12M gain: +0%, 20%, 30%, respectively
  • Why are markets faltering at the end of the year?
  • Foremost, to me, this can be attributed to profit taking. After all, markets were so strong throughout 2024. Is this period of weakness a sign of a turning point? We don’t think so.
  • Interest rates are up but they are hardly pushing levels that should undermine markets. And keep in mind the Fed doesn’t want financial conditions to tighten. This would offset any actions of Fed easing. This is the Fed put.
  • Moreover, the fundamental picture remains strong for 2025 and tailwinds are arguably stronger in 2025 than 2024. The new incoming administration is a positive. The Fed is dovish. ISM is bottoming and should turn up.
  • Mark Newton, Head of Technical Strategy, warns that weakness might continue into early January. So be mindful that we could see some early spillover into 2025.
  • But we would view that pullback as a buying opportunity. Buying the dip continues to make sense, in our view.

Happy New Year!!!

2024 ending on a whimper. Since 1928, weak final week = strong Jan 2025.
2024 ending on a whimper. Since 1928, weak final week = strong Jan 2025.
2024 ending on a whimper. Since 1928, weak final week = strong Jan 2025.
2024 ending on a whimper. Since 1928, weak final week = strong Jan 2025.

2024 ending on a whimper. Since 1928, weak final week = strong Jan 2025.

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Key incoming data December:

  • 12/2 9:45 AM ET: Nov F S&P Global Manufacturing PMI Tame
  • 12/2 10:00 AM ET: Nov ISM Manufacturing PMI Tame
  • 12/3 10:00 AM ET: Oct JOLTS Job Openings Tame
  • 12/4 9:45 AM ET: Nov F S&P Global Services PMI Tame
  • 12/4 10:00 AM ET: Nov ISM Services PMI Tame
  • 12/4 10:00 AM ET: Oct F Durable Goods Orders Tame
  • 12/4 2:00 PM ET:  Fed Releases Beige Book Dovish
  • 12/5 8:30 AM ET: Oct Trade Balance Tame
  • 12/6 8:30 AM ET: Nov Non-Farm Payrolls Tame
  • 12/6 9:00 AM ET: Nov F Manheim Used vehicle index Mixed
  • 12/6 10:00 AM ET: Dec P U. Mich. Sentiment and Inflation Expectation Tame
  • 12/9 11:00 AM ET: Nov NY Fed 1yr Inf Exp Tame
  • 12/10 6:00 AM ET: Nov Small Business Optimism Survey Tame
  • 12/10 8:30 AM ET: 3Q F Non-Farm Productivity Tame
  • 12/10 8:30 AM ET: 3Q F Unit Labor Costs Tame
  • 12/11 8:30 AM ET: Nov CPI Tame
  • 12/12 8:30 AM ET: Nov PPI Mixed
  • 12/16 8:30 AM ET: Dec Empire Manufacturing Survey Tame
  • 12/16 9:45 AM ET: Dec P S&P Global Manufacturing PMI Tame
  • 12/16 9:45 AM ET: Dec p S&P Global Services PMI Tame
  • 12/17 8:30 AM ET: Nov Retail Sales Data Tame
  • 12/17 9:00 AM ET: Dec P Manheim Used vehicle index Tame
  • 12/17 10:00 AM ET: Dec NAHB Housing Market Index Tame
  • 12/18 2:00 PM ET: Dec FOMC Decision Hawkish
  • 12/19 8:30 AM ET: 3Q T 2024 GDP Tame
  • 12/19 8:30 AM ET: Dec Philly Fed Business Outlook Tame
  • 12/19 10:00 AM ET: Nov Existing Home Sales Tame
  • 12/19 4:00 PM ET: Oct Net TIC Flows Tame
  • 12/20 8:30 AM ET: Nov PCE Deflator Tame
  • 12/20 10:00 AM ET: Dec F U. Mich. Sentiment and Inflation Expectation Tame
  • 12/23 8:30 AM ET: Nov Chicago Fed Nat Activity Index Tame
  • 12/23 10:00 AM ET: Dec Conference Board Consumer Confidence Tame
  • 12/24 10:00 AM ET: Nov New Home Sales Tame
  • 12/24 10:00 AM ET: Nov P Durable Goods Orders Tame
  • 12/30 10:30 AM ET: Dec Dallas Fed Manuf. Activity Survey Tame
  • 12/31 9:00 AM ET: Oct S&P CoreLogic CS home price Tame

Economic Data Performance Tracker 2024:

2024 ending on a whimper. Since 1928, weak final week = strong Jan 2025.

Economic Data Performance Tracker 2023:

2024 ending on a whimper. Since 1928, weak final week = strong Jan 2025.
Source: Fundstrat, Bloomberg

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