December 30th Market Overview

Happy Monday everyone.

Markets are down today on thin holiday trading, with the Dow bouncing all over the place. Year-end profit taking is weighing on major tech names, though NVIDA stands out as a bright light on positive AI developments.

Natural gas futures are ripping (+18%) on cold weather forecasts for Jan.

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Executive Summary

• Chicago PMI significantly misses expectations (36.9 vs 42.2 forecast), with over 98% of S&P 500 constituents trading lower, suggesting broader economic slowdown

• Natural gas futures up 19% on forecasts of colder-than-usual January temperatures

• Year-end profit-taking pressures tech sector despite strong 2024 performance

• Markets will close January 9th for national day of mourning honoring former President Carter

Market Overview

Key Market Drivers

1. Economic Concerns: Latest business activity data (The Chicago Business Barometer^™) suggests unexpected economic weakness heading into 2025, prompting caution
   

2. Weather Impact on Energy: January forecasts showing "much farther below average" temperatures for East Coast, driving energy commodity speculation
   

3. Holiday Market Dynamics: Final trading week characterized by institutional desk closures and reduced market participation, leading to price volatility
   

4. Portfolio Repositioning: Investors adjusting positions before year-end, with notable rotation out of 2024's best performers
   

5. Sentiment Shift: Growing caution from market veterans like Jeremy Siegel warning of potential 10% correction risk in 2025

Stock Spotlight

• $NVDA ▲ 1.7%: Only Dow gainer today, announces “Jetson Thor” humanoid robot computers launching H1 2025
  

• $MSTR ▼ 7.7%: Disclosed sale of 592,987 shares for $209M to purchase more bitcoin
  

• $BA ▼ 2.0%: South Korea orders inspection of all 737 aircraft following Jeju Air incident
  

• $TSM Planning 5-10% price hikes for advanced processes on AI demand

Big Name Updates

• $TSLA: Analysts expect record Q4 deliveries above 500k units; UK gigafactory plans rejected
  

• $NFLX: UBS maintains $1,040 price target after NFL games draw 24M viewers
  

• $AAPL: BTIG technician expresses caution heading into January
  

• $META: Trump urges Supreme Court to pause TikTok ban legislation

Other Notable Company News

• $AMD: Northland upgrades to outperform, $175 target on AI GPU market share gains
  

• $AAL: Raymond James upgrades to outperform, $24 target citing improved revenue outlook
  

• $DECK: UBS initiates coverage with buy rating, $232 target on Hoka shoe brand strength

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Sector Watch

Bond Market

Treasury yields down with the 10-year falling to 4.575%, below the closely watched 4.6% level.

The 2-year yield declined to 4.285%.

Policy Watch

NYSE and Nasdaq announced market closure for January 9th national day of mourning. Jeremy Siegel, WisdomTree senior economist, warns of increasing probability for market correction in 2025, citing major upward forces as already priced in.

January Fed commentary is putting folks on edge over the timing and frequency of potential Fed rate cuts in 2025

What to Watch

1. Natural Gas Price Movement:

• Weather forecasts showing colder-than-usual January temperatures

• East Coast expected to see peak cold mid-month

• Prices already up 58% in 2024

2. Q4 Earnings Season Prep:

• $TSLA delivery numbers expected this week

• Market reaction to guidance could set tone for tech sector

• Focus on AI impact across semiconductor space

3. Year-End Trading Patterns:

• Historical Santa Claus rally period continues

• Low liquidity could amplify price movements

• First week of January typically sees mean reversion from weak December closes

Thanks for reading 🙂

- John