A daily market update from FS Insight — what you need to know ahead of opening bell.
“No one can stop you from shining if you are standing in your own light.” ― Matshona Dhliwayo
Over the weekend
The American Worker Is Becoming More Productive WSJ
China’s central bank plans policy overhaul as pressure mounts on economy FT
Surgeon General Calls for Cancer Warnings on Alcohol NYT
Blast of frigid US weather revives volatility in heating fuel markets FT
Tesla’s Global Vehicle Deliveries Fell in 2024 for the First Time in Years WSJ
Biden blocks sale of US Steel to Japan’s Nippon SEM
Ken Griffin’s flagship hedge fund at Citadel climbs 15.1% in 2024 CNBC
BlackRock’s Bitcoin ETF Posts Record Outflow After Banner Year BBG
Warren Buffett’s Berkshire Hathaway beats S&P 500 in 2024, posts 9th straight up year CNBC
Hindenburg Research shorts Carvana, calling company’s turnaround a ‘mirage’ CNBC
South Korea’s Impeached President Fends Off Arrest Attempt Over Martial-Law Decree WSJ
It’s Christmas for the elephants as unsold trees are fed to the animals at Berlin Zoo AP
Bereaved whale spotted pushing another dead calf BBC
Chart of the Day
| Overnight |
| S&P Futures +16
point(s) (+0.3%
) Overnight range: -5 to +25 point(s) |
| APAC |
| Nikkei flat Topix flat China SHCOMP -1.57% Hang Seng +0.7% Korea +1.79% Singapore +0.03% Australia +0.6% India -0.76% Taiwan +0.33% |
| Europe |
| Stoxx 50 -0.56%
Stoxx 600 -0.3% FTSE 100 -0.11% DAX -0.45% CAC 40 -0.84% Italy -0.47% IBEX +0.02% |
| FX |
| Dollar Index (DXY) -0.28%
to 109.09 EUR/USD +0.18% to 1.0283 GBP/USD +0.12% to 1.2395 USD/JPY -0.1% to 157.35 USD/CNY +0.26% to 7.3187 USD/CNH +0.2% to 7.3551 USD/CHF -0.3% to 0.9096 USD/CAD -0.01% to 1.4401 AUD/USD +0.19% to 0.6215 |
| Crypto |
| BTC -0.69%
to 96457.36 ETH -0.14% to 3446.32 XRP +1.09% to 2.4113 Cardano +10.21% to 1.064 Solana +2.4% to 211.31 Avalanche +4.51% to 41.0 Dogecoin +0.89% to 0.3403 Chainlink +1.31% to 22.3 |
| Commodities and Others |
| VIX -0.73%
to 17.8 WTI Crude -0.33% to 72.89 Brent Crude -0.32% to 75.69 Nat Gas -3.33% to 3.54 RBOB Gas -0.17% to 2.048 Heating Oil -0.54% to 2.341 Gold -0.09% to 2655.61 Silver +0.47% to 29.71 Copper -0.04% to 4.024 |
| US Treasuries |
| 1M -3.9bps
to 4.2524% 3M -1.4bps to 4.2917% 6M -1.2bps to 4.2614% 12M -1.7bps to 4.1335% 2Y -0.4bps to 4.2351% 5Y -0.9bps to 4.3607% 7Y -1.1bps to 4.4578% 10Y -1.0bps to 4.5491% 20Y -1.1bps to 4.8329% 30Y -1.4bps to 4.7629% |
| UST Term Structure |
| 2Y-3
M Spread narrowed 1.3bps to -9.0
bps 10Y-2 Y Spread narrowed 0.8bps to 31.0 bps 30Y-10 Y Spread narrowed 0.4bps to 21.2 bps |
| Yesterday's Recap |
| SPX -0.22%
SPX Eq Wt -0.29% NASDAQ 100 -0.17% NASDAQ Comp -0.16% Russell Midcap -0.08% R2k +0.07% R1k Value -0.16% R1k Growth -0.16% R2k Value -0.22% R2k Growth +0.34% FANG+ +0.3% Semis +1.08% Software -0.21% Biotech +1.63% Regional Banks -1.11% SPX GICS1 Sorted: Energy +1.04% Utes +0.73% Comm Srvcs +0.64% Healthcare +0.01% Tech -0.21% Fin -0.21% SPX -0.22% Indu -0.37% Cons Staples -0.43% REITs -1.0% Materials -1.14% Cons Disc -1.27% |
| USD HY OaS |
| All Sectors -4.7bp
to 324bp All Sectors ex-Energy -4.1bp to 302bp Cons Disc -3.1bp to 282bp Indu -4.1bp to 243bp Tech -4.9bp to 312bp Comm Srvcs -4.3bp to 510bp Materials -4.7bp to 298bp Energy -8.3bp to 306bp Fin Snr -5.0bp to 283bp Fin Sub -1.0bp to 196bp Cons Staples -3.2bp to 281bp Healthcare -6.7bp to 380bp Utes -3.7bp to 232bp * |
| Date | Time | Description | Estimate | Last |
|---|---|---|---|---|
| 1/3 | 10AM | Dec ISM Manu PMI | 48.2 | 48.4 |
| 1/6 | 9:45AM | Dec F S&P Srvcs PMI | 58.5 | 58.5 |
| 1/6 | 10AM | Nov F Durable Gds Orders | -0.3 | -1.1 |
| 1/7 | 8:30AM | Nov Trade Balance | -78.2 | -73.836 |
| 1/7 | 10AM | Dec ISM Srvcs PMI | 53.0 | 52.1 |
| 1/7 | 10AM | Nov JOLTS | 7700.0 | 7744.0 |
| 1/8 | 2PM | Dec 18 FOMC Minutes | n/a | 0.0 |
MORNING INSIGHT
Good morning!
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.
Click HERE for more.
TECHNICAL
Fundstrat Head of Technical Strategy Mark Newton is on vacation this week. He is scheduled to resume publishing Monday, Jan. 6, 2025.
CRYPTO
We analyze the disconnect between equities and crypto, exploring whether bitcoin’s recent performance is signaling a broader market bottom or merely lagging equities. We also highlight the relative outperformance of the AI and memecoin sectors and what this could mean for the market’s next moves.
Click HERE for more.
First News
Stocks had a historically great 2024. But goldbugs had it even better.
The most-actively traded gold futures contract rose 27% last year, outperforming the S&P 500’s 23% advance. The last time the yellow metal gained more than the broad-based index while both assets were in the green for the year was in 2020, when worries about the Covid-19 pandemic sent investors rushing to the safety of gold.
The rally looks so good that even big Wall Street investors are salivating over it. (Typically, on Wall Street, buying gold carries a bit of a stigma because it doesn’t earn as much as other assets. And if investors are paying a premium for the services of a money manager, they want to get the most bang for their buck.)
Billionaire investor Ray Dalio, founder of Bridgewater Associates, said he wants to steer away from debt assets and invest in “hard money” like gold and bitcoin. Matthew McLennan, portfolio manager of First Eagle Investments’ global value strategy with $57 billion in assets, has an 11.4% positioning in gold due to its potential to hedge against losses. McLennan also owns Oracle and Meta.
Everyday investors are also enthusiastic about gold. Almost 40% of investors with at least $250,000 in investible assets said they had gold in their portfolios, up from 20% in 2023, a State Street survey published in November said.
Behind gold’s spectacular rally this year are bets that inflation will remain sticky, propelling the Federal Reserve to keep interest rates near multidecade highs to try to bring higher prices down.
Investors typically like to own gold during inflationary periods because it is supposed to keep its value even as other assets fall.
There are also other reasons that could be benefiting gold. Geopolitical tensions have escalated, foreign central banks have stepped up their gold purchases, and global debt keeps growing. Meanwhile, the stock market looks increasingly expensive, and concerns about an artificial intelligence bubble have ramped up.
The gold rally looks even more impressive when considering that the 10-year Treasury bond yield remained above 4% for most of 2024 (except August to October) and even ran above 4.5% to end the year. Since gold doesn’t actually earn any income, it competes for investors’ attention with yields, which do pay regular income.
Next up for gold: Wall Street banks expect that gold prices could climb as high as $3,000 a troy ounce, which would represent a gain of nearly 14% from its 2024 closing price.
Worth remembering, however, that while investing in gold seems to be paying off for now, over the long term, only stocks have the power to outperform every other asset.
It’s prudent to diversify.
