December 27th Market Overview

Happy Friday everyone.

Markets are down today, with tech stocks driving the broad decline. Despite this, major indices are on track for a winning holiday week. Treasury yields keep slowly creeping uprising, pressuring stocks.

Holiday retail sales show strong consumer spending.

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Let's dig in...

Executive Summary

• Major indices retreat but maintain positive overall for the holiday week
  

• Holiday retail sales exceed expectations, with notable strength in e-commerce and dining sectors
  

• Quantum computing sector sees remarkable gains, led by $RGTI +12% toward record highs. (Rigetti Computing)
  

• Tech sector faces pressure despite positive news from industry leaders

Market Overview

Key Market Drivers

1. Holiday Sales Performance: Mastercard SpendingPulse™ reports retail sales rose 3.8% YoY from November 1 to December 24, exceeding 3.2% forecast
   

2. Sector Rotation: Technology stocks face pressure despite positive company-specific news
   

3. Treasury Yield Impact: Rising rates creating headwinds for growth stocks
   

4. Trading Volumes: Year-end positioning affecting market dynamics with altered trading patterns
   

Stock Spotlight

• $RGTI: Quantum computing leader up ▲12%, extending month-to-date gains to 485%
  

• $AAPL: Maintains positive momentum as Wedbush sets street-high target of $325
  

• $NVDA: Crowned most traded stock of 2024, surpassing combined volume of $SPY and $TSLA
  

• $NFLX: Sets streaming records with NFL Christmas doubleheader, reaching 24.3M viewers
  

• $ONON: UBS reiterates buy rating with $63 target, projecting 22% five-year sales CAGR

Big Name Updates

• $MSFT: Negotiating revisions to OpenAI partnership, focusing on cloud exclusivity and IP rights

• $TSLA: Li Auto CEO challenges pure vision approach for Chinese market conditions

• OpenAI explores humanoid robotics development despite previous division closure

• $TME: Upgraded to buy from hold at 86 Research

Other Notable Company News

• $MSTR: Vivek Ramaswamy’s Strive applies for Bitcoin Bond ETF tracking convertible securities

• Red Cat Holdings drops ▼10% following 1,275% YTD rally

• $AT: Added to Citi’s focus list for 2025, citing underappreciated mobility segment potential

Sector Watch

Bond Market

The 10-year Treasury yield climbs 2 basis points to 4.603%, reaching its highest level since May. This movement continues to influence equity market sentiment, particularly affecting growth and tech sectors.

Policy Watch

Analysts at Parnassus Investments note expectations for broader market improvement in 2025 following the resolution of election uncertainties.

What to Watch

1. Quantum Computing Momentum: Watch for continued sector strength following $RGTI's performance

   • Sector showing unprecedented momentum

   • Growing institutional interest in quantum technology stocks
     

2. Holiday Sales Data Follow-through: Monitor impact on retail stocks

   • E-commerce showing particular strength

   • Restaurant sector benefiting from experience-based spending
     

3. Treasury Yield Movements: Track potential impact on growth stocks

   • Current levels testing May highs

   • Tech sector particularly sensitive to rate movements
     

4. Santa Claus Rally Period: Monitor traditional year-end strength

   • Historical performance suggests positive momentum

   • Year-end positioning and holiday-impacted volumes could create opportunities

P.S. 

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Thanks for reading 🙂

- John