Before the last opening bell of the year, the U.S. stock market futures are indicating another rocky opening, with the S&P 500 Index futures and the NASDAQ and Dow Jones counterparts all off more than 1% as we prepared this report. The trading day should be relatively quiet in terms of overall volume, as is often the case at the very end of the year.
There are no major economic reports scheduled for today or tomorrow. However, on Thursday the latest weekly initial jobless claims figures will be released, along with a construction spending report. On Friday, the ISM (Institute for Supply Management) Manufacturing Index for the month of December will be published. Next week, we will get a look at the ISM Services Index, which should help provide a more-detailed picture of the economy. Also, next Friday the government will deliver the December employment report.
There are few corporations posting quarterly profit reports this week. However, at the end of next week the fourth-quarter earnings season will commence. As is usually the case, the large banks and financial institutions will be the first to weigh in with their results. Specifically, next Friday we will hear from Bank of America (BAC), fund manager BlackRock (BLK) and Wells Fargo (WFC). The upcoming earnings season ought to go well, with most companies delivering healthy results. However, the outlook for 2025 will probably be the main area of focus.
The stock market has pulled back somewhat during the latter part of December. The selling has been relatively broad based with numerous equity sectors showing losses. Even the large cap technology issues that displayed so much strength in the past failed to provide much leadership. However, it is worth noting that for the past week or so, participation (volume) has been thin, with many professional traders and retail investors away for the holidays. In addition, some of the volatility that we have seen lately may reflect year-end portfolio repositioning, which can take the form of profit taking or even the selling of stocks for tax purposes. In either case, the S&P 500 Index is on track to close out 2024 with a better-than-20% annual gain, following the sizable return logged in 2023. Even though it seems a “Santa Claus” rally did not materialize this year, investors should still have much to celebrate.
Value Line wishes all our readers a Happy New Year and successful investing in 2025. – Adam Rosner
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
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