A daily market update from FS Insight — what you need to know ahead of opening bell
“Comparison is the thief of joy.” ― Theodore Roosevelt
Over the weekend
Jimmy Carter, Former U.S. President and Nobel Peace Prize Winner, Dies at 100 WSJ
Santa Claus Deserted the Market. It’s Still Been a Good Year for Stocks. BR
Even Rich Retirees Fear Outliving Their Money WSJ
Will you finally be able to buy a home in 2025? CNN
The Staggering Cost Needed for Trump’s Mass Deportation Plan WSJ
Why the ‘Dogs of the Dow’ Stocks Just Might Deliver in 2025 BR
The Number of Murders Kept Falling This Year, but Fear of Crime Persists NYT
US credit card defaults jump to highest level since 2010 FT
AI data centers exacerbate US domestic power issues SEM
Russian smugglers import luxury cars from Europe despite sanctions FT
Cocaine production reaches new heights SEM
World Bank upgrades China forecast citing recent reform efforts SEM
50 years later, Dungeons & Dragons still brings in millions of dollars—including nearly $110,000 in 2024 for one small Brooklyn business CNBC
Chart of the Day
| Overnight |
| S&P Futures -14
point(s) (-0.2%
) Overnight range: -24 to +9 point(s) |
| APAC |
| Nikkei -0.96%
Topix -0.6% China SHCOMP +0.21% Hang Seng -0.24% Korea -0.22% Singapore +0.64% Australia -0.32% India -0.71% Taiwan -0.37% |
| Europe |
| Stoxx 50 -0.01%
Stoxx 600 -0.17% FTSE 100 -0.2% DAX -0.14% CAC 40 +0.11% Italy +0.44% IBEX +0.43% |
| FX |
| Dollar Index (DXY) -0.09%
to 107.91 EUR/USD +0.15% to 1.0442 GBP/USD +0.14% to 1.2595 USD/JPY -0.06% to 157.77 USD/CNY +0.05% to 7.2994 USD/CNH +0.18% to 7.3135 USD/CHF flat at 0.902 USD/CAD -0.19% to 1.4384 AUD/USD +0.27% to 0.6234 |
| Crypto |
| BTC +0.49%
to 93665.59 ETH +2.02% to 3411.93 XRP -1.59% to 2.0737 Cardano +1.46% to 0.8709 Solana +1.27% to 192.86 Avalanche +2.49% to 36.67 Dogecoin +1.81% to 0.3202 Chainlink +1.22% to 21.22 |
| Commodities and Others |
| VIX +7.59%
to 17.16 WTI Crude -0.1% to 70.53 Brent Crude -0.11% to 74.09 Nat Gas +6.09% to 3.73 RBOB Gas -0.13% to 1.956 Heating Oil +1.15% to 2.271 Gold -0.34% to 2612.58 Silver +0.18% to 29.44 Copper +1.42% to 4.12 |
| US Treasuries |
| 1M +0.2bps
to 4.2927% 3M -1.1bps to 4.2627% 6M -1.1bps to 4.2794% 12M -2.5bps to 4.1599% 2Y -2.3bps to 4.3035% 5Y -3.3bps to 4.4278% 7Y -2.9bps to 4.5131% 10Y -2.4bps to 4.6011% 20Y -1.4bps to 4.8908% 30Y -1.0bps to 4.8068% |
| UST Term Structure |
| 2Y-3
M Spread narrowed 3.3bps to 0.2 bps 10Y-2 Y Spread widened 0.3bps to 29.6 bps 30Y-10 Y Spread widened 1.4bps to 20.4 bps |
| Yesterday's Recap |
| SPX -1.11%
SPX Eq Wt -0.68% NASDAQ 100 -1.36% NASDAQ Comp -1.49% Russell Midcap -0.95% R2k -1.56% R1k Value -0.65% R1k Growth -1.49% R2k Value -1.41% R2k Growth -1.71% FANG+ -1.63% Semis -1.01% Software -1.53% Biotech -1.4% Regional Banks -1.24% SPX GICS1 Sorted: Energy -0.01% Utes -0.29% Healthcare -0.51% Materials -0.57% Cons Staples -0.59% Fin -0.81% Indu -0.81% REITs -1.0% Comm Srvcs -1.08% SPX -1.11% Tech -1.49% Cons Disc -1.9% |
| USD HY OaS |
| All Sectors -1.0bp
to 321bp All Sectors ex-Energy -1.4bp to 297bp Cons Disc -0.1bp to 279bp Indu -0.5bp to 239bp Tech -0.5bp to 310bp Comm Srvcs -1.2bp to 504bp Materials -1.6bp to 293bp Energy -0.4bp to 311bp Fin Snr -0.1bp to 281bp Fin Sub -1.7bp to 188bp Cons Staples -1.1bp to 276bp Healthcare -7.2bp to 375bp Utes -0.3bp to 230bp * |
| Date | Time | Description | Estimate | Last |
|---|---|---|---|---|
| 1/2 | 9:45AM | Dec F S&P Manu PMI | 48.3 | 48.3 |
| 1/3 | 10AM | Dec ISM Manu PMI | 48.2 | 48.4 |
MORNING INSIGHT
Good morning!
We view the weakness in equities since Dec. 24 as largely due to profit taking and arguably the drop in market breadth is somewhat constructive for early 2025.
Click HERE for more.
TECHNICAL
Overall, this year’s SPX performance looks to finish out with at least the best election year returns since 1980. However, it’s fair to say that December’s rotation coupled with lack of broad-based participation has proven to be difficult for many investors to manage.
Click HERE for more.
CRYPTO
In our view, this cycle is far from over. However, until bonds find a bottom and the USD peaks, it’s prudent for more tactically-minded crypto investors to remain nimble and ready to capitalize on opportunities once a trend reversal is confirmed.
Click HERE for more.
First News
Ah the magic of the holidays! Family, delicious food, and gifts masquerading as debt.
More than 35% of Americans financed their holiday gifts this year, taking on an average of $1,181, according to a LendingTree survey published last week. A majority said they used credit cards, 24% said they put the purchases on a store card, 21% went for the buy now, pay later option, and 19% took out a personal loan.
That debt sure isn’t cheap because of how high interest rates are these days. For example, with the average credit card rate hovering above 20%, one would owe $236.20 in interest on that average borrowed amount. To put how much that is in context, that is almost enough to buy a Dyson cordless vacuum cleaner.
And for some, this new debt may just be added onto the old pile. Almost half of Americans still have debt from last year’s holidays, WalletHub recently found.
In ordinary circumstances, one could make the case for buying things on credit to some extent, but when rates are at multidecade highs, it becomes much more complicated. Just how many would be able to make the purchase if not for tacking on debt? How long would the repayments be dragged out for? How will that weigh on future purchases not related to the holidays?
None of this spells good things for the economy and instead paints a worrying picture about consumers’ financial health.
Of course, this was to be expected. What other options do consumers have when they have been living under higher rates, sticky inflation and slowing wage growth for nearly three years now? And while rates have started coming down, they’re still significantly higher than they used to be a few years ago.
As such, delinquency rates have increased from a year ago, Federal Reserve data shows. Specifically, U.S. credit card defaults in the first nine months of the year jumped to the highest level since 2010, the FT reported.
Consumers are the biggest driver of economic growth, so when they are constrained from making purchases because of bad credit or lack of cash, it tends to have ripple effects on the broader economy.
Maybe that’s why TikTokers have jumped in to help others with their budgets, to think of creative gifts, and to encourage thrifting.
To be sure, the average amount borrowed this year is lower than the record of $1,549 in 2022—which was probably due to the economy showing early signs of sputtering—but higher than $1,028 taken out last year. There are fewer questions about the economy’s strength this year compared to last, so the higher balances could mean that consumers feel pressured to keep up with appearances even if that means putting their financial health in a bad position.
If anything, one should never underestimate Americans’ propensity to engage in consumerism.
