Stocks trended higher for much of last week until Friday, when a Friday slide pulled several of the benchmark indexes listed here lower. Only the Dow and the Global Dow ended the week with gains, while the NASDAQ, the S&P 500, and the Russell 2000 finished in the red. Last Friday, word that the president would enforce tariffs against Canada, China, and Mexico cooled investors’ appetite for risk, sending bond yields and the dollar higher. Crude oil prices ended the week on an uptick but not enough to prevent prices from closing last week lower.
Wall Street got off to a rough start last Monday as the tech sector took a dive, particularly several chip makers. The NASDAQ fell 3.1%, while the S&P 500 (-1.5%) and the Russell 2000 (-1.1%) trended lower. The Dow (0.7%) and the Global Dow (0.2%) closed higher. Ten-year Treasury yields fell to 4.52% as investors shunned stocks for bonds. Crude oil prices dipped to $73.05 per barrel. The dollar and gold prices closed in the red.
Last Tuesday, tech shares rebounded from the prior day’s downturn, leading stocks higher. The NASDAQ led the benchmark indexes listed here, gaining 2.0% by the close of trading. The S&P 500 climbed 0.9%, the Dow rose 0.3%, and the Russell 2000 added 0.2%. The Global Dow fell 0.1%. Ten-year Treasury yields closed at 4.55%. Crude oil prices reversed a stretch of losses, gaining 1.1% to settle at $74.00 per barrel. The dollar advanced 0.5%, while gold prices rose 1.2%.
Stocks trended lower last Wednesday after the Federal Reserve held interest rates unchanged, as expected. The NASDAQ and the S&P 500 eac fell 0.5%, the Dow lost 0.3%, and the Russell 2000 slipped 0.2%. The Global Dow inched up 0.2%. Investors turned their focus to an upcoming batch of key corporate earnings, while continuing to assess potential tariffs and other aspects of President Trump’s economic policy. Ten-year Treasury yields remained unchanged at 4.55%. Crude oil prices slipped 1.2% to $72.92 per barrel. The dollar and gold prices each ticked up 0.1%.
Last Thursday saw stocks close higher after a choppy day of trading. The Russell 2000 (1.1%) and the Global Dow (0.7%) led the benchmark indexes listed here, followed by the S&P 500 (0.5%), the Dow (0.4%), and the NASDAQ (0.3%). Ten-year Treasury yields dipped 4.3 basis points to 4.51%. The dollar ticked up 0.1%, while gold prices rose 2.1%. Crude oil prices gained 0.8% to settle at $73.17 per barrel.
Stocks gave up gains last Friday after news that President Trump was pushing ahead with tariffs against China, Canada, and Mexico. The Russell 2000 lost 0.9%, followed by the Dow (-0.8%), the Global Dow (-0.6%), the S&P 500 (-0.5%), and the NASDAQ (-0.3%). Yields on 10-year Treasuries gained 5.7 basis points to settle at 4.56%. Crude oil prices climbed nearly 1.0%. The dollar jumped 0.7%, while gold prices fell 0.4%.
Stock Market Indexes
Market/Index
2024 Close
Prior Week
As of 1/31
Weekly Change
YTD Change
DJIA
42,544.22
44,424.25
44,544.66
0.27%
4.70%
NASDAQ
19,310.79
19,954.30
19,627.44
-1.64%
1.64%
S&P 500
5,881.63
6,101.24
6,040.53
-1.00%
2.70%
Russell 2000
2,230.16
2,307.74
2,287.69
-0.87%
2.58%
Global Dow
4,863.01
5,062.76
5,094.27
0.62%
4.76%
fed. funds target rate
4.25%-4.50%
4.25%-4.50%
4.25%-4.50%
0 bps
0 bps
10-year Treasuries
4.57%
4.62%
4.56%
-6 bps
-1 bps
US Dollar-DXY
108.44
107.44
108.49
0.98%
0.05%
Crude Oil-CL=F
$71.76
$74.56
$73.61
-1.27%
2.58%
Gold-GC=F
$2,638.50
$2,778.70
$2,833.20
1.96%
7.38%
Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.
Last Week’s Economic News
The Federal Open Market Committee met last week and decided, unanimously, to maintain the current federal funds target rate range at 4.25%-4.50%. While noting that both the economy and the labor market remained solid, inflation stayed elevated. The Committee made its decision despite President Trump’s request that it cut interest rates. Subsequent to the meeting, Fed Chair Jerome Powell indicated that the Fed needed to allow the economic policies of the Trump administration to be articulated prior to making any assessment.
According to the advance estimate, gross domestic product increased at an annual rate of 2.3% in the fourth quarter of 2024. The third quarter GDP rose 3.1%. The increase in GDP in the fourth quarter primarily reflected increases in consumer spending (4.2%) and government spending (2.5%) that were partly offset by a decrease in investment (-5.6%). Imports, which are a subtraction in the calculation of GDP, decreased 0.8%. The personal consumption expenditures (PCE) price index rose 2.3% in the fourth quarter. The PCE price index excluding food and energy rose 2.5%.
In December, personal income rose 0.4%, compared to a 0.3% increase in November. Personal consumption expenditures, a measure of consumer spending, jumped from 0.4% in November to 0.7% last month. Prices consumers paid for goods and services increased 0.3% in December after inching up 0.1% the previous month. Consumer prices less food and energy increased 0.2% last month following a 0.1% advance in November.
Sales of new single-family homes rose 3.6% in December and 6.7% above the December 2023 estimate. For 2024, sales were 2.5% above the 2023 figure. Total inventory sat at an 8.5-month supply at the current sales pace. The median sales price was $427,000 in December, higher than the November price of $402,500 and above the December 2023 estimate of $418,300. For 2024, the average median sales price was $420,100. The average sales price in December was $513,600 ($485,000 in November), which exceeded the December 2023 price of $493,000. For 2024, the average sales price was $512,200 ($514,000 for 2023).
New orders for manufactured durable goods in December, down four of the last five months, decreased 2.2%, according to the U.S. Census Bureau. This followed a 2.0% November decrease. Excluding transportation, new orders increased 0.3%. Excluding defense, new orders fell 2.4%. Transportation equipment, also down four of the last five months, drove the December decline, falling 7.4%. From December 2023, new orders for durable goods fell 1.5%.
The advance report on the international trade in goods showed the deficit was $122.1 billion in December, up $18.6 billion, or 18.0%, from November. Exports of goods for December were $167.5 billion, $7.8 billion, or 4.5% less than November exports. Imports of goods for December were $289.6 billion, $10.8 billion, or 3.9%, more than November imports.
The national average retail price for regular gasoline was $3.103 per gallon on January 27, $0.006 per gallon below the prior week’s price but $0.008 per gallon higher than a year ago. Also, as of January 27, the East Coast price climbed $0.007 to $3.076 per gallon; the Midwest price decreased $0.039 to $2.946 per gallon; the Gulf Coast price rose $0.005 to $2.696 per gallon; the Rocky Mountain price advanced $0.009 to $2.920 per gallon; and the West Coast price increased $0.010 to $3.881 per gallon.
For the week ended January 25, there were 207,000 new claims for unemployment insurance, a decrease of 16,000 from the previous week’s level. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended January 18 was 1.2%. The advance number of those receiving unemployment insurance benefits during the week ended January 18 was 1,858,000, a decrease of 42,000 from the previous week’s level, which was revised up by 1,000. States and territories with the highest insured unemployment rates for the week ended January 11 were New Jersey (2.9%), Rhode Island (2.9%), California (2.5%), Minnesota (2.5%), Illinois (2.4%), Washington (2.4%), Massachusetts (2.3%), Montana (2.1%), Puerto Rico (2.1%), Alaska (2.0%), Michigan (2.0%), Pennsylvania (2.0%), and West Virginia (2.0%). The largest increases in initial claims for unemployment insurance for the week ended January 18 were in California (+5,725), West Virginia (+649), Arkansas (+312), the District of Columbia (+195), and Oklahoma (+135), while the largest decreases were in Michigan (-9,351), Texas (-7,323), Ohio (-5,314), Illinois (-5,304), and Georgia (-4,692).
Eye on the Week Ahead
This week’s focus is on the labor sector with the releases of the JOLTS report and the employment situation. Overall, employment has been steady, which has factored into the Federal Reserve’s decision to maintain rates.
Stocks posted strong gains in December after losing ground in November. The gains likely reflected investor optimism that a second Trump administration will favor businesses, with the hope that the president-elect will take a more moderate stance on trade tariffs, although the White House intimated that tariffs may be in the offing for China, Canada, and Mexico. Ten of the 11 market sectors ended December higher, with the exception of information technology. Communication services, financials, and health care outperformed. Over the last 12 months, each of the market sectors showed positive results, led by communication services, financials, and consumer discretionary.
The latest data showed inflation has stubbornly resisted falling lower. The personal consumption expenditures (PCE) price index has risen from a low of 2.1% for the 12 months ended in September to 2.6% for the same period ended in December, which supports the Federal Open Market Committee’s assessment that inflation “remains somewhat elevated.” Another potential inflationary risk is the impact of looming tariffs threatened by the White House, which gives the Fed ample justification to hold interest rates steady over the next few months.
Growth of the U.S. economy continued at a modest pace. The gross domestic product (GDP) fell marginally short of expectations after increasing 2.3% in the fourth quarter following a 3.1% increase in the third quarter (see below). For 2024, GDP rose 2.8%, 0.1 percentage point less than the 2023 rate. Personal consumption expenditures, the largest contributor in the calculation of GDP, rose 4.2% in December, with spending rising on durable goods, nondurable goods, and services. For 2024, consumer spending rose 2.8%. Despite falling 5.6% in December, gross private domestic investment (including nonresidential and residential investment) climbed 4.0% in 2024.
Job growth rose by 2.2 million in 2024, averaging a monthly gain of 186,000. The unemployment rate remained steady at 4.1%. Wages rose 3.9% over the past 12 months. The number of job openings (8.1 million jobs in November–the latest data), hires (5.3 million), and separations (5.1 million) remained fairly consistent through 2024. The latest unemployment data showed total claims paid at the end of January was only slightly higher than the figure from January 2024 (see below).
The S&P reported better-than-expected fourth-quarter earnings growth early in the reporting season. According to FactSet, the net profit margin for the S&P 500 was 12.1% for the fourth quarter, which is below the previous quarter’s net profit margin but above the net profit margin from a year ago.
The real estate sector reversed course in December. Sales of both new and existing homes increased last month. Mortgage rates have begun to trend marginally lower, which has impacted sales. According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.96% as of January 23. That’s down from 7.04% one week ago but up from 6.69% one year ago
Industrial production expanded for the second consecutive month in December (see below). Manufacturing output, mining, and utilities increased for the month. Over the last 12 months, industrial production, mining, and utilities increased, while manufacturing output was unchanged. Purchasing managers reported manufacturing continued to slow in December as new orders decreased, while the rate of decline in production accelerated. On the other hand, the services sector grew higher in December, which saw strengthening of business activity and new orders.
Ten-year Treasury yields closed the month falling to the lowest rate in six weeks as economic data in general, and inflation data in particular, point to status quo for the Fed’s monetary policy. The two-year note closed December at 4.23%, down 3.0 basis points from a month earlier. The dollar index was essentially unchanged from a month earlier. Gold prices rose in December, reaching a new record high. Crude oil prices ticked up by about $2.00 per barrel by the end of January as investors awaited further insights regarding President Trump’s looming tariffs. The retail price of regular gasoline was $3.103 per gallon on January 27, $0.097 above the price a month earlier and $0.008 higher than the price a year ago.
Stock Market Indexes
Market/Index
2024 Close
Prior Month
As of 1/31
Monthly Change
YTD Change
DJIA
42,544.22
42,544.22
44,544.66
4.70%
4.70%
NASDAQ
19,310.79
19,310.79
19,627.44
1.64%
1.64%
S&P 500
5,881.63
5,881.63
6,040.53
2.70%
2.70%
Russell 2000
2,230.16
2,230.16
2,287.69
2.58%
2.58%
Global Dow
4,863.01
4,863.01
5,094.27
4.76%
4.76%
fed. funds target rate
4.25%-4.50%
4.25%-4.50%
4.25%-4.50%
0 bps
0 bps
10-year Treasuries
4.57%
4.57%
4.56%
-1 bps
-1 bps
US Dollar-DXY
108.44
108.44
108.49
0.05%
0.05%
Crude Oil-CL=F
$71.76
$71.76
$73.61
2.58%
2.58%
Gold-GC=F
$2,638.50
$2,638.50
$2,833.20
7.38%
7.38%
Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark the performance of specific investments.
Latest Economic Reports
Employment: Job growth was stronger than expected in December, with the addition of 256,000 new jobs after adding only 212,000 (revised) new jobs in November. Monthly job growth has averaged 186,000 over the prior 12 months, compared with 251,000 per month in 2023. In December, the unemployment rate decreased 0.1 percentage point to 4.1%. After increasing earlier in the year, the unemployment rate has been either 4.1% or 4.2% for the past seven months. The number of unemployed persons in December edged down 235,000 from November to 6.9 million. In December, the number of long-term unemployed (those jobless for 27 weeks or more) was 1.6 million, a decline of 103,000 from the November figure. These individuals accounted for 22.4% of all unemployed persons. The labor force participation rate in December was 62.5%, unchanged from the previous month and from December 2023. The employment-population ratio increased 0.2 percentage point to 60.0% in December (60.1% in December 2023). In December, average hourly earnings increased by $0.10, or 0.3%, to $35.69. Over the past 12 months ended in December, average hourly earnings rose by 3.9%. The average workweek in December was 34.3 hours for the fifth month in a row.
There were 207,000 initial claims for unemployment insurance for the week ended January 25, 2025. During the same period, the total number of workers receiving unemployment insurance was 1,858,000. A year ago, there were 225,000 initial claims, while the total number of workers receiving unemployment insurance was 1,829,000.
FOMC/interest rates: As expected, the Federal Open Market Committee maintained the federal funds rate at the current 4.25%-4.50% following its meeting in January. In arriving at its decision, the Committee noted that the economy continued to expand at a solid pace and the labor market remained solid. Inflation, while it had eased, remained somewhat elevated. As to future policy actions, the FOMC stated that “the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks.” In addition, “the Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals.”
GDP/budget: The economy, as measured by gross domestic product, accelerated at an annualized rate of 2.3% in the fourth quarter following increases of 3.1% in the third quarter. A year ago, GDP expanded at an annualized rate of 3.2% in the fourth quarter. Consumer spending, as measured by the PCE index, rose 4.2% in the fourth quarter, following a 3.7% rise in the third quarter and above the 2023 pace of 3.5%. Spending on services rose 3.1% in the fourth quarter, compared with a 2.8% increase in the third quarter. Consumer spending on goods increased 6.6% in the fourth quarter (5.6% in the third quarter). Fixed investment declined 0.6% in the fourth quarter after increasing 2.1% in the third quarter. Nonresidential (business) fixed investment declined 2.2% in the fourth quarter after climbing 4.0% in the previous quarter. Residential fixed investment rose 5.3% in the fourth quarter following a 4.3% decrease in the third quarter. Exports fell 0.8% in the fourth quarter, compared with a 9.6% increase in the previous quarter. Imports, which are a negative in the calculation of GDP, also decreased 0.8% in the fourth quarter after rising 10.7% in the third quarter. Consumer prices increased 2.3% in the fourth quarter (1.5% in the third quarter). Excluding food and energy, consumer prices advanced 2.5% in the fourth quarter (2.2% in the third quarter). For 2024, GDP increased 2.8%, compared with an annual increase of 2.9% in 2023. The increase in GDP in 2024 reflected increases in consumer spending, investment, government spending, and exports, while imports increased. The price index for gross domestic purchases increased 2.3% in 2024, compared with an increase of 3.3% in 2023. The PCE price index increased 2.5%, compared with an increase of 3.8% in 2023. Excluding food and energy prices, the PCE price index increased 2.8% last year, compared with a 2023 increase of 4.1%.
December 2024 saw the federal budget deficit come in at $87.0 billion, down from the $129.3 billion deficit for December 2023. The deficit for the first three months of fiscal year 2025, at $710.9 billion, is roughly $200.0 billion higher than the first three months of the previous fiscal year. So far in fiscal year 2025, government receipts totaled $1,083.0 trillion, while government outlays totaled $1,794.0 trillion. For fiscal year 2024, which ended September 2024, the government deficit was $1.8 trillion, which was $137.6 billion above the government deficit for fiscal year 2023. Through the first three months of fiscal year 2025, individual income tax receipts added up to $518.0 billion, while outlays for Social Security totaled $374.0 billion.
Inflation/consumer spending: According to the latest Personal Income and Outlays report, personal income and disposable personal income each rose 0.4% in December after both increased 0.3% in November. Consumer spending advanced 0.7% in December after increasing 0.4% the previous month. Consumers spent nearly 30.0% on housing and utilities in December, while costs for transportation services accounted for about 26%. Consumer prices inched up 0.3% in December after ticking up 0.1% in November. Excluding food and energy (core prices), prices rose 0.2% in December. Consumer prices rose 2.6% since December 2023, while core prices increased 2.8%. Over the last 12 months, prices for food rose 1.6%, while energy prices fell 1.1%.
The Consumer Price Index rose 0.4% in December after ticking up 0.3% in November. Over the 12 months ended in December, the CPI rose 2.9%, up from 2.7% in November. Core prices (excluding food and energy) rose 0.2% in December and 3.2% over the last 12 months. Energy prices rose 2.6% in December, accounting for over 40% of the monthly all items increase. Gasoline prices increased 4.4% over the month. Prices for food also increased in December, rising 0.3% as prices for food at home and for food away from home each increased 0.3%. Prices for products and services that increased in December included shelter, airline fares, used cars and trucks, new vehicles, motor vehicle insurance, and medical care. Prices for personal care, communication, and alcoholic beverages were among the few major categories that decreased over the month. For the 12 months ended in December, energy prices decreased 0.5%, while food prices rose 2.5% and shelter prices advanced 4.6%. Gasoline prices dropped 3.4% over the last 12 months, while fuel oil prices fell 13.1%.
Prices that producers received for goods and services advanced 0.2% in December following a 0.4% increase in November. Producer prices increased 3.3% for the 12 months ended in December, up from a 1.1% increase for 2023. The December increase in producer prices can be traced to a 0.6% advance in prices for goods. Prices for services were unchanged. Producer prices less foods, energy, and trade services edged up 0.1% in December, the same as in November. Prices less foods, energy, and trade services rose 3.3% in 2024 after advancing 2.7% in 2023.
Housing: Sales of existing homes increased 3.6% in December and were up 9.3% from December 2023. The median existing-home price was $404,400 in December, unchanged from the November price but 6.0% higher than the December 2023 estimate. Unsold inventory of existing homes represented a 3.3-month supply at the current sales pace, down from November (3.8 months) but above the 3.1-month supply in December 2023. Sales of existing single-family homes increased 1.9% in December and were 6.1% higher than the December 2023 estimate. The median existing single-family home price was $409,300 in December, essentially the same as the November figure but above the December 2023 estimate of $385,800.
New single-family home sales rose 2.2% in December and 6.7% above the December 2023 figure. Sales in 2024 outpaced the 2023 figure by 2.5%. The median sales price of new single-family houses sold in December was $427,000 ($402,500 in November) and higher than the December 2023 estimate of $418,300. The average median sales price for 2024 was $420,100, lower than the 2023 average median sales price of $428,600. The December average sales price was $513,600 ($485,000 in November), well above the December 2023 average sales price of $493,000. For 2024, the average sales price was $512,200, under the 2023 estimate of $514,000. The inventory of new single-family homes for sale in December represented a supply of 8.5 months at the current sales pace.
Manufacturing: Industrial production increased 0.9% in December following a 0.2% advance in November. Manufacturing output rose 0.6% in December after gaining 0.4% in November. Mining increased 1.8%, while utilities advanced 2.1%. Over the past 12 months ended in December, total industrial production was 0.5% above its year-earlier reading. For the 12 months ended in December, manufacturing was unchanged, utilities advanced 4.3%, while mining inched up 0.3%.
New orders for durable goods, down four of the last five months, decreased 2.2% in December after declining 2.0% in the prior month. For the 12 months ended in December, durable goods orders fell 1.5%. Excluding transportation, new orders increased 0.3% in December. Excluding defense, new orders declined 2.4%. Transportation equipment, down four of the last five months, led the December decrease, falling 7.4%.
Imports and exports: Import prices rose 0.1% for the third straight month in December and have not risen by more than 0.1% since a 0.9% advance in April. Import prices rose 2.2% from December 2023, the largest 12-month increase since the year ended December 2022. Import fuel prices advanced 1.4% in December, the largest monthly advance since April 2024. Import fuel prices rose 0.3% over the past 12 months, the first year-over-year increase since July 2024. Prices for nonfuel imports ticked up 0.1% in December and advanced 2.4% for the 12 months ended in December. Prices for exports rose 0.3% in December, driven higher by both nonagricultural and agricultural prices. Export prices rose 1.0% over the past year, the largest 12-month advance since the 12-month period ended January 2023.
The international trade in goods deficit was $122.1 billion in December, up $18.6 billion, or 18.0%, from November. Exports of goods were $167.5 billion in December, $7.8 billion, or 4.5% less than November exports. Imports of goods were $289.6 billion in December, $10.8 billion, or 3.9%, more than November imports. Over the 12 months ended in December, the goods deficit grew 39.5%. Exports fell 1.6%, while imports increased 12.4%.
The latest information on international trade in goods and services, released January 7, is for November and revealed that the goods and services trade deficit was $78.2 billion, an increase of $4.6 billion, or 6.2%, from the October deficit. November exports were $273.4 billion, $7.1 billion, or 2.7% more than October exports. November imports were $351.6 billion, $11.6 billion, or 3.4% more than October imports. Year to date, the goods and services deficit increased $93.9 billion, or 13.0%, from the same period in 2023. Exports increased $111.5 billion, or 4.0%. Imports increased $205.3 billion, or 5.8%.
International markets: Canada’s GDP rose 0.2% in December and 1.4% for 2024, buoyed by strong retail trade, manufacturing, and construction. As for inflationary pressures, Germany’s annual consumer inflation rate dropped to 2.3% in January, a 0.1 percentage point from the December figure, as food and energy costs decreased. The annual inflation rate in the United Kingdom unexpectedly declined to 2.5% in December. The European Central Bank lowered interest rates by 25 basis points in January in response to easing price pressures. In January, the STOXX Europe 600 Index rose 6.2%; the United Kingdom’s FTSE advanced 5.4%; Japan’s Nikkei 225 Index fell 0.8%; and China’s Shanghai Composite Index decreased 4.6%.
Consumer confidence: The Conference Board Consumer Confidence Index® decreased in January to 104.1 following a 109.8 reading in December. The Present Situation Index, based on consumers’ assessment of current business and labor market conditions, dropped 9.7 points to 134.3 in January. The Expectations Index, based on consumers’ short-term outlook for income, business, and labor market conditions, tumbled 2.6 points to 83.9 in January, just above the threshold of 80.0 that usually signals a recession ahead.
Eye on the Month Ahead
Entering February, much of the focus will be on the economy, inflation, and global unrest, particularly in the Middle East. Recent data has shown that inflationary pressures ticked higher at the end of 2024, prompting much debate as to whether, or when, the Federal Reserve, which does not meet again until March, will decrease interest rates. There will likely be more executive orders from President Trump for investors to consider.
Wall Street closed up last week as investors considered the bevy of executive orders issued by President-elect Donald Trump during his first week in office. Each of the benchmark indexes listed here ended the week higher, led by the Global Dow and the Dow. Communication services, health care, and industrials outperformed among the market sectors, while energy lagged. Ten-year Treasury yields ticked higher. Crude oil prices dropped nearly 4.5%, the largest weekly decline since November. The dollar index extended its decline to a one-month low. Gold reached its highest level since October.
With the U.S. stock market closed last Monday in observance of Martin Luther King Jr. Day, investors had a little extra time to consider the impact of President Trump’s moves after his first day in office. Market gains were broad-based, with health care and industrials leading the sectors. Each of the benchmark indexes listed here advanced, led by the Russell 2000, which gained 1.9%. The Dow moved up 1.2%, followed by the S%P 500 (0.9%), while the NASDAQ and the Global Dow each advanced 0.6%. Ten-year Treasury yields slipped to 4.57%. Crude oil prices declined 2.3% to close at about $76.09 per barrel. The dollar fell 1.3%, while gold prices rose 0.2%.
Stocks continued to rally last Wednesday. The NASDAQ gained 1.3%, the S&P 500 rose 0.6%, the Dow rose 0.3%, and the Global Dow edged up 0.1%. The Russell 2000 declined 0.6%. Yields on 10-year Treasuries ticked up to 4.59%. Crude oil prices fell 0.6% to $75.41 per barrel. The dollar index moved up 0.2%, and gold prices climbed 0.3%.
Each of the benchmark indexes listed here posted solid gains last Thursday, with the S&P 500 (0.5%) reaching its first record high of 2025. The Dow added 0.9%, the Global Dow rose 0.8%, the Russell 2000 advanced 0.5%, and the NASDAQ gained 0.2%. The yield on 10-year Treasuries climbed to 4.63%. Crude oil prices fell again, closing at $74.28 per barrel. The dollar and gold prices edged lower.
The rally for stocks stalled last Friday as tech shares struggled. Among the benchmark indexes listed here, only the Global Dow (1.3%) was able to tick higher. The NASDAQ (-0.5%) fell the furthest, while the Dow, the S&P 500, and the Russell 2000 each declined 0.3%. The decline in crude oil prices continued, ten-year Treasury yields fell to 4.62%, the dollar slumped, while gold prices rose 0.5%.
Stock Market Indexes
Market/Index
2024 Close
Prior Week
As of 1/24
Weekly Change
YTD Change
DJIA
42,544.22
43,487.83
44,424.25
2.15%
4.42%
NASDAQ
19,310.79
19,630.20
19,954.30
1.65%
3.33%
S&P 500
5,881.63
5,996.66
6,101.24
1.74%
3.73%
Russell 2000
2,230.16
2,275.88
2,307.74
1.40%
3.48%
Global Dow
4,863.01
4,951.44
5,062.76
2.25%
4.11%
fed. funds target rate
4.25%-4.50%
4.25%-4.50%
4.25%-4.50%
0 bps
0 bps
10-year Treasuries
4.57%
4.60%
4.62%
2 bps
5 bps
US Dollar-DXY
108.44
109.39
107.44
-1.78%
-0.92%
Crude Oil-CL=F
$71.76
$77.99
$74.56
-4.40%
3.90%
Gold-GC=F
$2,638.50
$2,739.60
$2,778.70
1.43%
5.31%
Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.
Last Week’s Economic News
Sales of existing homes rose 2.2% in December, the strongest pace since February 2024. Year over year, sales increased 9.3%. Total inventory sat at a 3.3-month supply at the current sales pace. The median existing home price was $404,400 in December, unchanged from the November figure but 6.0% above the December 2023 estimate. Single-family home sales advanced 1.9% in December and were up 10.1% from a year ago. The median existing single-family home price was $409,300 in December, marginally ahead of the November rate, and up 6.1% from December 2023. According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.96% as of January 23. That’s down from 7.04% one week ago but up from 6.69% one year ago.
The national average retail price for regular gasoline was $3.109 per gallon on January 20, $0.066 per gallon above the prior week’s price and $0.047 per gallon higher than a year ago. Also, as of January 20, the East Coast price climbed $0.071 to $3.069 per gallon; the Midwest price increased $0.086 to $2.985 per gallon; the Gulf Coast price rose $0.026 to $2.691 per gallon; the Rocky Mountain price advanced $0.032 to $2.911 per gallon; and the West Coast price increased $0.061 to $3.871 per gallon.
For the week ended January 18, there were 223,000 new claims for unemployment insurance, an increase of 6,000 from the previous week’s level. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended January 11 was 1.2%. The advance number of those receiving unemployment insurance benefits during the week ended January 11 was 1,899,000, an increase of 46,000 from the previous week’s level, which was revised down by 6,000. This is the highest level for insured unemployment since November 13, 2021, when it was 1,974,000. States and territories with the highest insured unemployment rates for the week ended January 4 were Rhode Island (3.2%), New Jersey (3.1%), Minnesota (2.7%), Washington (2.5%), Illinois (2.4%), Massachusetts (2.4%), California (2.3%), Connecticut (2.2%), Montana (2.2%), and Pennsylvania (2.2%). The largest increases in initial claims for unemployment insurance for the week ended January 11 were in Michigan (+14,985), California (+12,731), Texas (+11,439), Illinois (+5,634), and Missouri (+4,845), while the largest decreases were in New York (-15,396), Washington (-3,877), Wisconsin (-3,830), Oregon (-2,954), and Minnesota (-2,046).
Eye on the Week Ahead
The Federal Open Market Committee meets for the first time this year, when the Committee is expected to keep the federal funds rate range at its current 4.25%-4.50%. Investors will be paying particular attention to any indications from the Fed of future interest rate decreases. An inflation indicator favored by the Fed is the personal consumption expenditures price index, which is out this week for December. Also available is the first iteration of gross domestic product for the fourth quarter of 2024.
Stocks closed higher last week, despite a few shaky days. Each of the benchmark indexes listed here posted gains, led by the Russell 2000 and the Dow. Consumer discretionary stocks outperformed along with energy, financials, materials, and industrials. Investor sentiment improved following favorable inflation data and solid earnings from major banks. Crude oil prices increased for the fourth straight week, primarily driven by concerns of new U.S. sanctions against Russian oil producers, which raised worries of tighter global oil supplies. The dollar index declined, snapping a six-week rally.
The week kicked off with stocks closing mostly higher with the exception of tech shares, which lagged. The Dow led the benchmark indexes listed here, gaining 0.9% followed by the Global Dow (0.3%), the S&P 500 (0.2%), and the Russell 2000 (0.1%). The NASDAQ edged down 0.4%. The yield on 10-year Treasuries reached its highest level since late 2023, settling at 4.80%. Crude oil prices continued the prior week’s surge, climbing to $78.71 per barrel, the highest rate in more than four months. The dollar inched up 0.2%, while gold prices fell 1.3%.
Stocks closed last Tuesday mixed, with the Russell 2000 (1.1%), the Global Dow (0.5%), and the Dow (0.5%) leading the benchmark indexes listed herek while the S&P 500 edged up 0.1%. The NASDAQ fell 0.2% as some megacaps declined. Ten-year Treasury yields slid to 4.78%. Crude oil prices declined 1.3% to $77.76 per barrel. The dollar dropped 0.7%, while gold prices rose 0.4%.
Wall Street enjoyed the biggest daily gains in over two months last Wednesday on the heels of strong bank earnings and moderating core inflation growth (see below). The NASDAQ, which had been floundering, gained 2.5%. The Russell 2000 followed a solid performance the previous day by gaining 2.0% on Wednesday. The S&P 500 added 1.8%. The Dow rose 1.7%, and the Global Dow gained 1.4%. With rising stock values, bond prices also advanced, pulling yields lower. Ten-year Treasury yields fell 13.5 basis points to 4.65%. Crude oil prices climbed to $80.48 per barrel, the highest price since August. The dollar ticked lower, while gold prices rose 1.4%.
Stocks closed mostly lower last Thursday. Shares of big tech companies receded, dragging the market lower. The NASDAQ fell 0.9%. The S&P 500 saw its three-day rally end after declining 0.2%. The Dow slid 0.2%. The Global Dow (0.4%) and the Russell 2000 (0.2%) moved higher. Ten-year Treasury yields continued their two-day slide, falling to 4.60%. Crude oil prices fell 1.6%, settling at $78.77 per barrel. The dollar slipped 0.1%, while gold prices gained 1.1%.
Tech shares rebounded at the end of the week, helping to push most stocks higher last Friday. The NASDAQ gained 1.5%, followed by the S&P 500 (1.0%), the Dow (0.8%), the Global Dow (0.6%), and the Russell 2000 (0.4%). Ten-year Treasury yields were flat. Crude oil prices fell for the second straight day, declining 0.8%. The dollar gained 0.4%, while gold prices dipped 0.5%.
Stock Market Indexes
Market/Index
2024 Close
Prior Week
As of 1/17
Weekly Change
YTD Change
DJIA
42,544.22
41,938.45
43,487.83
3.69%
2.22%
NASDAQ
19,310.79
19,161.63
19,630.20
2.45%
1.65%
S&P 500
5,881.63
5,827.04
5,996.66
2.91%
1.96%
Russell 2000
2,230.16
2,189.23
2,275.88
3.96%
2.05%
Global Dow
4,863.01
4,801.42
4,951.44
3.12%
1.82%
fed. funds target rate
4.25%-4.50%
4.25%-4.50%
4.25%-4.50%
0 bps
0 bps
10-year Treasuries
4.57%
4.77%
4.60%
-17 bps
3 bps
US Dollar-DXY
108.44
109.65
109.39
-0.24%
0.88%
Crude Oil-CL=F
$71.76
$76.65
$77.99
1.75%
8.68%
Gold-GC=F
$2,638.50
$2,717.10
$2,739.60
0.83%
3.83%
Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.
Last Week’s Economic News
The Consumer Price Index (CPI) increased 0.4% in December, in line with expectations but up from a 0.3% advance in November. Energy prices rose 2.6% last month, accounting for over 40% of the overall increase in the CPI. Food prices also increased in December, rising 0.3%. Prices less food and energy rose 0.2% in December, down from November’s 0.3% increase. Price indexes that increased in December include shelter, airline fares, used cars and trucks, new vehicles, motor vehicle insurance, and medical care. The indexes for personal care, communication, and alcoholic beverages were among the few major indexes that decreased over the month. The CPI rose 2.9% over the 12 months ended in December after increasing 2.7% over the 12 months ended in November. Prices less food and energy rose 3.2% over the last 12 months. Energy prices decreased 0.5% for the 12 months ended in December. Food prices increased 2.5% over the last year.
Prices at the producer level rose a less-than-expected 0.2% in December. Producer prices rose 0.4% in November. Producer prices rose 3.3% in 2024 after increasing 1.1% in 2023. The December increase was attributed to a 0.6% jump in prices for goods. Prices for services were unchanged after rising 0.3% in November. Last month, energy prices increased 3.5%, while prices for foods ticked down 0.1%.
Retail sales rose 0.4% in December and were up 3.9% since December 2023. Year to date, retail sales were up 3.0%. Retail trade sales were up 0.6% in December and rose 4.2% from last year. Motor vehicle and parts dealers sales were up 8.4% over the last 12 months, while nonstore (online) retailer sales were up 6.0% from December 2023.
Import prices ticked up 0.1% in December for the third straight month. Import prices advanced 2.2% over the past 12 months, the largest 12-month increase since the period ended December 2022. Import fuel rose 1.4% in December, the largest monthly advance since the index increased 3.9% in April 2024. Import fuel prices rose 0.3% over the past 12 months, the first yearly increase since the 12-month period ended July 2024. Import prices excluding fuel inched up 0.1% last month and have not decreased on a monthly basis since May 2024.
Industrial production (IP) increased 0.9% in December after moving up 0.2% in November. In December, gains in the output of aircraft and parts contributed 0.2 percentage point to overall IP growth following the resolution of a work stoppage at a major aircraft manufacturer. Manufacturing output rose 0.6% after gaining 0.4% in November. The indexes for mining and utilities climbed 1.8% and 2.1%, respectively, in December. From December 2023, industrial production was 0.5% above its year-earlier level.
The U.S. Treasury budget deficit was $86.7 billion in December, well below the November deficit of $366.8 billion and under the December 2023 deficit of $129.4 billion. Last month, government receipts were $454.4 billion of which $212.0 billion was attributable to individual income taxes. December outlays totaled $541.1 billion with the biggest contributor being Social Security payments ($124.0 billion). For the fiscal year, which began in October, the deficit was $710.9 billion, about $200.0 billion above the deficit over the comparable period last fiscal year.
The housing sector saw a dip in new home construction in December. The number of issued building permits fell 0.7% for the month and was 3.1% below the December 2023 rate. However, building permits for single-family homes increased 1.6% in December. For 2024, the number of issued building permits were 2.6% below the 2023 figure. Housing starts rose 15.8% last month but were 4.4% under the December 2023 figure. Housing starts for single-family homes ended December 3.3% over the November rate. For the year, housing starts were 3.9% below the prior year’s total. Housing completions declined 4.8% in December and 0.8% under the December 2023 total. The number of single-family home completions was 7.4% below the November rate. In 2024, total home completions were 12.4% above the 2023 pace.
The national average retail price for regular gasoline was $3.043 per gallon on January 13, $0.004 per gallon below the prior week’s price and $0.015 per gallon less than a year ago. Also, as of January 13, the East Coast price climbed $0.008 to $2.998 per gallon; the Midwest price decreased $0.039 to $2.899 per gallon; the Gulf Coast price rose $0.010 to $2.665 per gallon; the Rocky Mountain price fell $0.020 to $2.879 per gallon; and the West Coast price increased $0.017 to $3.810 per gallon.
For the week ended January 11, there were 217,000 new claims for unemployment insurance, an increase of 14,000 from the previous week’s level, which was revised up by 2,000. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended January 4 was 1.2%. The advance number of those receiving unemployment insurance benefits during the week ended January 4 was 1,859,000, a decrease of 18,000 from the previous week’s level, which was revised up by 10,000. States and territories with the highest insured unemployment rates for the week ended December 28 were New Jersey (2.9%), Rhode Island (2.9%), Minnesota (2.8%), Washington (2.5%), Massachusetts (2.3%), California (2.2%), Connecticut (2.2%), Illinois (2.2%), Alaska (2.1%), Montana (2.1%), and Pennsylvania (2.1%). The largest increases in initial claims for unemployment insurance for the week ended January 4 were in New York (+22,233), Georgia (+7,636), Texas (+5,812), South Carolina (+2,844), and Oregon (+2,567), while the largest decreases were in Michigan (-7,040), New Jersey (-4,683), Massachusetts (-4,201), Connecticut (-3,749), and Iowa (-3,555).
Eye on the Week Ahead
The holiday-shortened week includes one economic report of note: the December data on sales of existing homes. November saw sales increase 4.8% for the month and 2.6% over the last 12 months.
Stocks fell sharply last week as favorable economic data furthered sentiment that the Federal Reserve would keep interest rates elevated for a longer period of time this year. Each of the benchmark indexes lost value with only energy and health care advancing, while the remaining market sectors ended the week in the red. Crude oil prices rose to levels not seen since October as new sanctions against Russia’s oil sector raised concerns of global supply disruptions. Ten-year Treasury yields ended the week at their highest levels in 14 months. The dollar index closed at its strongest rate since 2022. Gold prices climbed above $2,700.00 per ounce, extending gains for the fourth straight session.
A tech rally boosted the NASDAQ (1.2%) and the S&P 500 (0.6%) last Monday. The Global Dow gained 0.5%, while the Dow and the Russell 2000 each fell 0.1%. Ten-year Treasury yields closed the session at 4.61%. The surge in crude oil prices ended with prices tumbling 0.7% to $73.48 per barrel. The dollar lost 0.6%, while gold prices fell 0.3%.
The prior day’s tech rally proved short-lived as stocks tumbled last Tuesday. The NASDAQ fell 1.9%, followed by the S&P 500 (-1.1%), the Russell 2000 (-0.7%), the Dow (-0.4%), and the Global Dow (-0.3%). Investors may have surmised that favorable economic conditions will support fewer interest rate cuts, which dragged stocks lower, but sent bond yields higher. Ten-year Treasury yields closed at 4.68% after gaining 6.5 basis points. Crude oil prices rose 0.9% to $74.25 per barrel. The dollar advanced 0.4%, and gold prices rose 0.7%.
Stocks closed mixed last Wednesday as the Dow (0.3%) and the S&P 500 (0.2%) advanced, while the Russell 2000 (-0.5%), the Global Dow (-0.2%), and the NASDAQ (-0.1%) edged lower. Ten-year Treasury yields closed the session at 4.69%, near their highest level since 2008. Crude oil prices fell 1.3% to $73.30 per barrel. The dollar (0.4%) and gold prices (0.6%) climbed higher.
The U.S. stock market and the Nasdaq stock exchange were closed last Thursday, which was declared a national day of mourning for deceased President Jimmy Carter.
Wall Street took a tumble last Friday. A strong jobs report (see below) dampened hopes of more interest rate cuts by the Federal Reserve in 2025. The small caps of the Russell 2000 declined 2.2%. The Dow and the NASDAQ each lost 1.6%. The S&P 500 fell 1.5%, while the Global Dow dipped 1.3%. Ten-year Treasury yields rose to 4.77%, the dollar rose 0.4%, and gold prices increased 1.1%. Crude oil prices jumped 3.7%.
Stock Market Indexes
Market/Index
2024 Close
Prior Week
As of 1/10
Weekly Change
YTD Change
DJIA
42,544.22
42,732.13
41,938.45
-1.86%
-1.42%
NASDAQ
19,310.79
19,621.68
19,161.63
-2.34%
-0.77%
S&P 500
5,881.63
5,942.47
5,827.04
-1.94%
-0.93%
Russell 2000
2,230.16
2,268.47
2,189.23
-3.49%
-1.84%
Global Dow
4,863.01
4,868.29
4,801.42
-1.37%
-1.27%
fed. funds target rate
4.25%-4.50%
4.25%-4.50%
4.25%-4.50%
0 bps
0 bps
10-year Treasuries
4.57%
4.60%
4.77%
17 bps
20 bps
US Dollar-DXY
108.44
108.92
109.65
0.67%
1.12%
Crude Oil-CL=F
$71.76
$74.00
$76.65
3.58%
6.81%
Gold-GC=F
$2,638.50
$2,650.70
$2,717.10
2.50%
2.98%
Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.
Last Week’s Economic News
Employment rose by 256,000 in December, well above the 2024 average monthly gain of 186,000. In December, employment trended up in health care, government, and social assistance. Retail trade added jobs in December following a job loss in November. Employment for October was revised up by 7,000 to 43,000 but was revised down in November by 15,000 to 212,000. With these revisions, employment in October and November combined was 8,000 lower than previously reported. Employment rose by 2.2 million in 2024, down from 3.0 million in the previous year. The total number of unemployed in December was 6.9 million, a reduction of 235,000 from the November total. The unemployment rate ticked down 0.1 percentage point to 4.1%. After increasing earlier in the year, the unemployment rate has been either 4.1% or 4.2% for the past seven months. In December, the number of long-term unemployed (those jobless for 27 weeks or more) declined by 103,000 to 1.6 million but was up by 278,000 from a year earlier. The labor force participation rate was unchanged at 62.5%, while the employment-population ratio rose 0.2 percentage point to 60.0%. In December, average hourly earnings rose by $0.10, or 0.3%, to $35.69. Over the past 12 months, average hourly earnings have increased by 3.9%. The average workweek was 34.3 hours for the fifth month in a row.
The S&P Global US Services PMI® Business Activity Index reached a 33-month high of 56.8 in December following a reading of 56.1 in November. According to a survey of purchasing managers by S&P Global, the services sector saw a strengthening in business activity and new orders in December as customers showed a greater willingness to spend following the results of the presidential election. With the number of orders growing, companies increased employment for the first time in five months. Meanwhile, cost inflation eased to the slowest pace in almost a year, with charges rising only modestly.
The goods and services trade deficit report, released January 7, was for November 2024 and revealed the trade deficit was $78.1 billion, 6.2% above the October deficit. November exports were $273.4 billion, 2.7% more than October exports. November imports were $351.6 billion, 3.4% more than October imports. Year to date, the goods and services deficit increased $93.9 billion, or 13.0%, from the same period in 2023. Exports increased $111.5 billion, or 4.0%. Imports increased $205.3 billion, or 5.8%.
According to the Job Openings and Labor Turnover Summary, the number of job openings was little changed at 8.1 million in November but was down by 833,000 from a year earlier. Job openings increased in professional and business services (+273,000), finance and insurance (+105,000), and private educational services (+38,000) but decreased in information (-89,000). The number of hires in November increased marginally at 5.3 million but was 300,000 under the November 2023 rate. The number of total separations in November was little changed at 5.1 million but was down by 287,000 over the year.
The national average retail price for regular gasoline was $3.047 per gallon on January 6, $0.041 per gallon below the prior week’s price but $0.026 per gallon less than a year ago. Also, as of January 6, the East Coast price climbed $0.034 to $2.990 per gallon; the Midwest price increased $0.063 to $2.938 per gallon; the Gulf Coast price rose $0.042 to $2.655 per gallon; the Rocky Mountain price advanced $0.018 to $2.899 per gallon; and the West Coast price increased $0.023 to $3.793 per gallon.
For the week ended January 4, there were 201,000 new claims for unemployment insurance, a decrease of 10,000 from the previous week’s level. This was the lowest level in 11 months. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended December 28 was 1.2%. The advance number of those receiving unemployment insurance benefits during the week ended December 28 was 1,867,000, an increase of 33,000 from the previous week’s level, which was revised down by 10,000. States and territories with the highest insured unemployment rates for the week ended December 21 were New Jersey (2.4%), Rhode Island (2.3%), Minnesota (2.2%), Washington (2.2%), Alaska (2.0%), California (2.0%), Massachusetts (1.9%), Illinois (1.8%), Montana (1.8%), Nevada (1.7%), New York (1.7%), and Pennsylvania (1.7%). The largest increases in initial claims for unemployment insurance for the week ended December 28 were in Michigan (+7,881), New Jersey (+5,731), Pennsylvania (+5,319), Massachusetts (+3,611), and Connecticut (+3,348), while the largest decreases were in California (-9,263), Texas (-8,351), Florida (-1,691), North Carolina (-1,456), and Tennessee (-1,412).
Eye on the Week Ahead
There’s plenty of important economic data released this week. Most of the economic reports will cover December and include annual figures for 2024. Most investors will pay particular attention to the Consumer Price Index, the Producer Price Index, and the report on industrial production.
A rise in values last Friday wasn’t enough to prevent stocks from closing generally lower last week. Each of the benchmark indexes declined to start the new year, with the exception of the Russell 2000. Among the market sectors, only energy, utilities, real estate, and health care advanced, while consumer discretionary fell the furthest. Ten-year Treasury yields ended the week where they began. Crude oil prices reached a two-month high, driven by cold weather in Europe and the U.S. coupled with growing optimism over increasing Chinese demand. The dollar remained near its highest levels in two years as investors banked on continuing U.S. economic resilience and fewer interest rate cuts. Gold prices rose following a dip in prices the previous week.
Stocks closed lower for a third straight session last Monday to begin the final trading days of 2024. Tech shares, which had been the bellwether of the market all year, took a tumble, along with consumer staples, consumer discretionary, and communication services. The NASDAQ declined 1.2%, followed by the S&P 500 (-1.1%), the Dow (-1.0%), the Russell 2000 (-0.8%), and the Global Dow (-0.7%). Ten-year Treasury yields fell to 4.54%, a loss of 7.4 basis points. Crude oil prices gained 0.8% to close at $71.14 per barrel. The dollar ticked up 0.1%, while gold prices slid 0.4%.
Wall Street ended December and 2024 on a bit of a sour note. Megacaps declined for the second straight day, pulling stocks lower last Tuesday. The NASDAQ fell 0.9%, the S&P 500 lost 0.4%, and the Dow dipped 0.1%. The Russell 2000 and the Global Dow each edged up 0.1%. Crude oil prices continued to climb higher following news that China’s manufacturing activity grew in December for the third straight month. Yields on 10-year Treasuries ticked up 2.8 basis points to 4.57%. The dollar and gold prices advanced.
The first day of trading in the new year saw stocks get off to a rough start, continuing the slump that marked the end of 2024. Of the benchmark indexes listed here, only the Russell 2000 closed up, and that was by just 0.1%. The Dow fell 0.4%, the Global Dow declined 0.3%, the S&P 500 and the NASDAQ each ended the session down 0.2%. Ten-year Treasury yields remained at 4.57%. Crude oil prices continued to surge, gaining 2.0% to close at $73.12 per barrel. The dollar rose 0.7%, and gold prices advanced 1.1%.
Stocks closed higher last Friday, led by a surge in tech shares. The NASDAQ advanced 1.8% followed by the Russell 2000 (1.7%), the S&P 500 (1.3%), the Dow (0.8%), and the Global Dow (0.4%). Yields on 10-year Treasuries ticked up 0.2 basis points to settle at 4.59%. Crude oil prices rose for the fourth straight session, gaining 1.2%. The dollar and gold prices declined.
Stock Market Indexes
Market/Index
2024 Close
Prior Week
As of 1/3
Weekly Change
YTD Change
DJIA
42,544.22
42,992.21
42,732.13
-0.60%
0.44%
NASDAQ
19,310.79
19,722.03
19,621.68
-0.51%
1.61%
S&P 500
5,881.63
5,970.84
5,942.47
-0.48%
1.03%
Russell 2000
2,230.16
2,244.59
2,268.47
1.06%
1.72%
Global Dow
4,863.01
4,897.69
4,868.29
-0.60%
0.11%
fed. funds target rate
4.25%-4.50%
4.25%-4.50%
4.25%-4.50%
0 bps
0 bps
10-year Treasuries
4.57%
4.61%
4.60%
-1 bps
3 bps
US Dollar-DXY
108.44
108.02
108.92
0.83%
0.44%
Crude Oil-CL=F
$71.76
$70.28
$74.00
5.29%
3.12%
Gold-GC=F
$2,638.50
$2,632.50
$2,650.70
0.69%
0.46%
Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.
Last Week’s Economic News
According to the survey of purchasing managers by S&P Global, the manufacturing sector ended 2024 trending lower. After advancing in November, December saw a sharp reduction in new orders, while the rate of decline in production quickened. Business confidence waned and input costs to manufacturers rose sharply, prompting an increase in selling prices. One plus is that employment increased modestly for the second straight month. At 49.4, the S&P Global US Manufacturing Purchasing Managers’ Index™ fell from November’s rate of 49.7, indicating that manufacturing declined.
The national average retail price for regular gasoline was $3.006 per gallon on December 30, $0.018 per gallon below the prior week’s price and $0.083 per gallon less than a year ago. Also, as of December 30, the East Coast price ticked up $0.011 to $2.956 per gallon; the Midwest price decreased $0.060 to $2.875 per gallon; the Gulf Coast price slid $0.034 to $2.613 per gallon; the Rocky Mountain price fell $0.006 to $2.881 per gallon; and the West Coast price decreased $0.005 to $3.770 per gallon.
For the week ended December 28, there were 211,000 new claims for unemployment insurance, a decrease of 9,000 from the previous week’s level, which was revised up by 1,000. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended December 21 was 1.2%, a decrease of 0.1 percentage point from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended December 21 was 1,844,000, a decrease of 52,000 from the previous week’s level, which was revised down by 14,000. States and territories with the highest insured unemployment rates for the week ended December 14 were New Jersey (2.4%), California (2.2%), Minnesota (2.2%), Washington (2.2%), Alaska (2.1%), Rhode Island (2.1%), Illinois (2.0%), Massachusetts (1.9%), Montana (1.8%), Nevada (1.7%), New York (1.7%), and Pennsylvania (1.7%). The largest increases in initial claims for unemployment insurance for the week ended December 21 were in New Jersey (+4,085), Kentucky (+2,135), Missouri (+2,108), Connecticut (+2,088), and Tennessee (+2,018), while the largest decreases were in New York (-965), Florida (-883), West Virginia (-473), Minnesota (-368), and Kansas (-295).
Eye on the Week Ahead
Heading into the new year, all eyes will be on the December employment figures, released at the end of this week. Employment rose by 227,000 in November, although the unemployment rate ticked up 0.1 percentage point to 4.2%. The Federal Reserve pays particular attention to the jobs report as it relates to the Fed’s primary policy goals of full employment and 2.0% inflation. A favorable jobs report supports moderation in the timing of further interest rate reductions.
The year 2024 was extraordinary for the economy and the markets. High interest rates, rising unemployment, turmoil in the Middle East, and the ongoing Russia/Ukraine war, were some of the many factors that should have signaled economic contraction and a downturn in the stock market. Yet, the opposite occurred. Gross domestic product expanded by 3.1% in the third quarter and 2.9% year over year. Each of the major stock market indexes listed here posted solid year-end gains. Inflation came down. Corporate earnings grew, despite the unemployment rate inching higher.
While data showed price pressures slowed in 2024, consumers faced the stark reality of the overall high cost of living. According to the Consumer Price Index (CPI), prices for food rose 2.4% for the 12 months ended in November, while shelter prices rose 4.7%. Prices at the wholesale level rose 3.0% for the year, the largest increase since moving up 4.7% for the 12 months ended February 2023.
The economy grew in 2024, proving that it was able to withstand the Federal Reserve’s aggressive policy of interest rate hikes from the previous year. Consumer spending remained strong, despite rising unemployment, which provided a boost to the overall economy. In addition, increased nonresidential (business) spending, headed by cash-rich technology companies, and solid wage and income growth, all contributed to overall economic strength. However, economic conditions were at the top of consumer concerns throughout much of 2024, particularly in the context of the presidential election. Consumer sentiment drooped in December amid weaker assessments of the present situation, while short-term expectations for business and labor saw a sharp decline.
In March 2022, the Federal Reserve began to aggressively raise interest rates as part of a restrictive policy aimed at reining in escalating inflation. In 2023, there were signs that the Fed’s monetary policy was paying off. Price growth slowed without triggering a recession. In 2024, the CPI declined intermittently, moving from 3.1% in January to a low of 2.4% in September, before ticking higher to 2.7% in November, still above the Fed’s 2.0% target. The progress in moderating price pressures, coupled with economic resilience, allowed the Fed to lower interest rates by 100 basis points by the end of the year. Nevertheless, interest rate projections for 2025 were tempered as the Fed signaled only two rate cuts, depending on inflation and economic data.
The housing sector, which cooled in 2023 on the heels of higher interest rates, rebounded somewhat in 2024. Although the Fed reduced the federal funds rate, mortgage interest rates remained elevated. According to Bankrate, the 30-year fixed-rate mortgage was 7.03% as of December 30. That’s down from a high of 7.39% in May. With the Fed tempering its projections for interest rate cuts in 2025, the consensus is that mortgage rates will remain at or near their current levels. Purchase prices for both new and existing homes also increased year over year. Despite rising lending rates and higher home prices, both new and existing home sales rose over the course of the year.
The U.S. economy proved to be resilient in 2024. Gross domestic product expanded during each of the first three quarters of the year, culminating in a 3.1% advance in the third quarter. Consumer spending, the linchpin of the economy, also showed strength, climbing 3.7% in the third quarter. Consumer spending on both goods and services rose throughout the year.
The employment sector, expected by some to slow with rising interest rates, maintained strength throughout the year. While the number of new jobs trended lower during the second half of the year, job growth averaged 186,000 per month through November. The number of employed persons changed little from a year earlier. The total number of unemployed rose by 883,000 since November 2023, while the unemployment rate, at 4.2%, was 0.5 percentage point above the year-earlier rate.
One of the primary factors in the drop in overall inflation was a decline in energy prices. According to the CPI, energy prices fell 3.2% over the 12 months ended in November. Gasoline prices dropped 8.1% over the same period. Food prices, on the other hand, rose 2.4%, while prices for shelter increased 4.7%.
Total industrial production declined 0.9% for the year. Manufacturing, which accounts for about 78.0% of total production, decreased 1.0%. There was little optimism from purchasing managers about the state of the manufacturing sector, which saw falling output and higher prices. On the other hand, purchasing managers reported that the services sector expanded at the steepest rate in 33 months amid growing optimism about business conditions under the incoming Trump administration.
As 2024 drew to a close, there were some positives to consider upon entering the new year. By the end of 2024, Wall Street enjoyed the best two-year run since 1997-1998. If corporate earnings continue to grow, that would bode well for stocks in 2025. There are factors that will come into play next year, but how they impact the economy and markets is open to speculation. How much longer will the Russia/Ukraine war last, and how much more financial aid will be coming from the United States? The Hamas/Israel conflict could expand to include other countries, impacting other lives and economies.
Market/Index
2023 Close
As of 9/30
2024 Close
Month Change
Q4 Change
2024 Change
DJIA
37,689.54
42,330.15
42,544.22
-5.27%
0.51%
12.88%
Nasdaq
15,011.35
18,189.17
19,310.79
0.48%
6.17%
28.64%
S&P 500
4,769.83
5,762.48
5,881.63
-2.50%
2.07%
23.31%
Russell 2000
2,027.07
2,229.97
2,230.16
-8.40%
0.01%
10.02%
Global Dow
4,355.28
5,029.62
4,863.01
-3.06%
-3.31%
11.66%
fed. funds target rate
5.25%-5.50%
4.75%-5.00%
4.25%-4.50%
-25 bps
-50 bps
-100 bps
10-year Treasuries
3.86%
3.80%
4.57%
40 bps
77 bps
71 bps
US Dollar-DXY
101.39
100.75
108.44
2.55%
7.63%
6.95%
Crude Oil-CL=F
$71.30
$68.35
$71.76
5.53%
4.99%
0.65%
Gold-GC=F
$2,072.50
$2,654.60
$2,638.50
-0.70%
-0.61%
27.31%
Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.
Snapshot 2024
The Markets
Equities: Stocks began 2024 on a positive note and ended the year trending higher. Throughout the year, Wall Street bucked analysts’ predictions. Higher interest rates and rising unemployment didn’t deter investors from seeking equities. Despite rising global tensions, the economy proved resilient, corporate profits rose, and the once anticipated economic recession never materialized. New innovations and the growth of AI spurred technology stocks in 2024, with megacaps and artificial intelligence shares leading the charge. Foreign investment in U.S. securities reached a record high of over $30.0 trillion. Each of the benchmark indexes listed here closed 2024 much higher compared to 2023, with the NASDAQ, the S&P 500, and the Dow each hitting record highs. Stocks got an additional boost in September when the Federal Reserve began lowering its policy rate for the first time since 2020. The November election of former President Donald Trump also provided traders with guarded optimism that taxes will be lowered and less regulation will further spur corporate profits. In 2024, each of the 11 market sectors ended the year in the black. Information technology and communication services gained more than 40.0%, while shares in consumer discretionary and financials advanced more than 30.0%.
Bonds: While growth in the stock market was fairly consistent this year, the same can’t be said for the bond market. Throughout most of 2024, U.S. bond yields fluctuated appreciably. Bond prices declined over the first four months of the year as bond yields rose. Global tensions and a shift in Federal Reserve policy influenced the bond market. By the end of 2024, over $600.0 billion was invested in the global bond market as investors locked in some of the highest yields in decades ahead of uncertainties likely in 2025. Ten-year Treasury yields rose higher until May, when they began trending downward, reaching a low mark in September. However, the results of November’s election pushed yields higher as investors anticipated proposed tariffs and tax cuts to increase government spending. Heading into the new year, bond investors will continue to assess the Federal Reserve’s implication that it is strongly considering a slowdown in the reduction of interest rates. The two-year Treasury note hovered around 4.36% at the end of 2024, which saw yields range from 3.51% to 5.05% during the year.
Oil: Crude oil prices were heavily influenced by Chinese demand and tensions in the Middle East. West Texas Intermediate (WTI) crude oil prices began the year at about $80.00 per barrel, then rode a wave of volatility throughout 2024. After peaking at about $87.00 per barrel in early April, crude oil prices experienced a range of price swings, falling as low as $65.75 per barrel in September, to ultimately settle at around $71.00 per barrel by the end of December. Chinese demand underwhelmed for much of the year, despite several government-backed stimulus packages aimed at spurring the economy. Tensions in the Middle East escalated during the year, leading to fears of oil-supply disruptions. Heading into 2025, some forecasters expect the hands-off policies espoused by the new administration may lead to U.S. production growth.
Prices at the pump trended higher during the first half of the year, then slid lower through December, largely responding to changes in global economics, supply and demand, and other extraordinary factors attributable to the unrest in the Middle East. The average retail price for a gallon of regular gasoline was $3.089 at the beginning of the year. By the end of June, the price had risen to $3.438 per gallon, then steadily declined for the remainder of the year to an average price of $3.024 on December 23.
FOMC/interest rates: The target range for the federal funds rate began the year at 5.25%-5.50% following several interest rate increases by the Federal Open Market Committee (FOMC) in 2023. The Committee, in its battle to reduce inflation and maximize employment, did not adjust the federal funds rate during the first half of 2024, noting the uncertainty of the economy and ongoing risks of inflation. However, in September, the FOMC cut rates by 50.0 basis points and followed that reduction with two more 25.0-basis point reductions through December, lowering the federal funds rate by 100.0 basis points for the year. While price pressures have moderated since early 2022, the rate of inflation has remained stubbornly above the Fed’s 2.0% target, hovering between an annual rate of 2.4% (PCE price index) and 2.7% (CPI). The FOMC proffered a more cautious tone in predicting rate adjustments in 2025, projecting two 25.0-basis-point reductions.
US Dollar-DXY: The U.S. Dollar Index had a solid year against a basket of currencies, rising from an initial value of about 102.20 to a tad over 108.00 by the end of December, hitting its highest level since 2022. During the first half of the year, rising prices and higher interest rates attracted investors seeking higher returns, increasing the demand for the dollar. When the Fed reduced interest rates, the dollar slid lower. The results of the presidential election drove the dollar higher following three months of weakening. Almost every major currency lost value against the dollar this year. The anticipated deregulation of business and tax cuts are expected to enhance the dollar’s value even further in 2025.
Gold: Gold prices enjoyed noteworthy gains in 2024, moving from around $2,000 per ounce, to a peak of nearly $2,800 per ounce in November, before settling at around $2,600 per ounce by the end of the year. Gold reached a number record high prices throughout the year. Factors that helped gold prices advance in 2024 include several interest rate cuts, political instability in Eastern Europe, a conflict in the Middle East, and uncertainty in various foreign financial markets.
Last Month’s Economic News
Employment: Job growth was stronger than expected in November, with the addition of 227,000 new jobs after adding only 36,000 new jobs in October. Monthly job growth has averaged 186,000 over the prior 12 months, compared with 255,000 per month in 2023. In November, the unemployment rate increased 0.1 percentage point to 4.2% and has remained in the range of 3.7%-4.3% for the year. The number of unemployed persons edged up 161,000 from October to 7.1 million. In November, the number of long-term unemployed (those jobless for 27 weeks or more) changed minimally at 1.7 million. These individuals accounted for 23.2% of all unemployed persons. The labor force participation rate inched down 0.1 percentage point to 62.5% in November (62.8% at the end of 2023). The employment-population ratio decreased 0.2 percentage point to 59.8% in November (60.4% in November 2023). In November, average hourly earnings increased by $0.13 to $35.61. Over the past 12 months ended in November, average hourly earnings rose by 4.0% (average hourly earnings were $34.23, up 4.1% in 2023). The average workweek increased by 0.1 hour to 34.3 hours in November, the same as in November 2023.
There were 219,000 initial claims for unemployment insurance for the week ended December 21, 2024. During the same period, the total number of workers receiving unemployment insurance was 1,910,000. Over the course of the year, initial weekly claims gradually moved higher, peaking in November. A year ago, there were 213,000 initial claims, while the total number of workers receiving unemployment insurance was 1,817,000.
FOMC/interest rates: As expected, the Federal Open Market Committee reduced the target range for the federal funds rate by 25.0 basis points to the current 4.25%-4.50% following its meeting in December. In arriving at its decision, the Committee noted that economic activity has moved at a solid pace and the labor market has generally eased, while the unemployment rate remained low. Inflation, while it had eased, remained somewhat elevated. As to future policy actions, the FOMC stated that “the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks.” In addition, “the Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals.” Projections for the federal funds rate indicate the possibility of two 25.0-basis-point rate decreases in 2025, fewer than previously anticipated.
GDP/budget: The economy, as measured by gross domestic product, accelerated at an annualized rate of 3.1% in the third quarter, following increases of 1.6% in the first quarter and 3.0% in the second quarter. A year ago, GDP expanded at an annualized rate of 4.4% in the third quarter and 2.9% for 2023. Consumer spending, as measured by the personal consumption expenditures index, rose 3.7% in the third quarter, higher than in the second quarter (2.8%) and above the 2023 pace of 2.5%. Spending on services rose 2.8% in the third quarter, compared with a 2.7% increase in the second quarter. Consumer spending on goods increased 5.6% in the third quarter (3.0% in the second quarter). Fixed investment advanced 2.1% in the third quarter (2.3% in the second quarter). Nonresidential (business) fixed investment rose 4.0% in the third quarter, 0.1 percentage point above the rate in the second quarter. Residential fixed investment declined 4.3% in the third quarter following a 2.8% decrease in the second quarter. Exports rose 9.6% in the third quarter, compared with a 1.0% increase in the previous quarter. Imports, which are a negative in the calculation of GDP, advanced 10.7% in the third quarter after rising 7.6% in the second quarter. Consumer prices increased 1.5% in the third quarter (2.5% in the second quarter). Excluding food and energy, consumer prices advanced 2.2% in the third quarter (2.8% in the second quarter).
November 2024 saw the federal budget deficit come in at $366.8 billion, up roughly $52.8 billion over the deficit from a year earlier. The deficit for the first two months of fiscal year 2025, at $624.2 billion, is $243.6 billion higher than the first two months of the previous fiscal year. For fiscal year 2024, which ended September 2024, the government deficit was $1.8 trillion, which was $137.6 billion above the government deficit for fiscal year 2023. For fiscal year 2024, government outlays increased $617.0 billion, while government receipts increased $480.0 billion. Individual income tax receipts rose by roughly $250.0 billion, and corporate income tax receipts increased by $110.0 billion.
Inflation/consumer spending: According to the latest Personal Income and Outlays report, personal income and disposable personal income each rose 0.3% in November after both increased 0.7% in October. Consumer spending advanced 0.4% in November after increasing 0.3% the previous month. Consumer prices inched up 0.1% in November after being unchanged in October. Excluding food and energy (core prices), prices rose 0.1% in November, 0.2 percentage point less than the monthly increase in October. Consumer prices rose 2.4% since November 2023, while core prices increased 2.8%.
The Consumer Price Index rose 0.3% in November after ticking up 0.2% in October. Over the 12 months ended in November, the CPI rose 2.7%, up from 2.6% in October. Excluding food and energy prices, the CPI rose 0.3% in November and 3.3% for the year ended in November, unchanged from the 12-month period ended in October. Costs for services remain elevated, despite a dip lower in November. Prices for both energy and food increased 0.2% in November. Prices for shelter rose 0.3% in November, accounting for nearly 40% of the overall monthly CPI advance. For the 12 months ended in November, energy prices decreased 3.2%, while food prices rose 2.4% and shelter prices advanced 4.7%. Gasoline prices dropped 8.1% over the last 12 months, while fuel oil prices fell 19.5%.
Prices that producers received for goods and services advanced 0.4% in November following a 0.3% increase in October. Producer prices increased 3.0% for the 12 months ended in November, up from a 2.6% increase for the year ended in October. The November 12-month increase was the largest since the period ended February 2023. Producer prices less foods, energy, and trade services inched up 0.1% in November and 3.5% for the year, while prices excluding food and energy moved up 0.2% for the month and 3.4% for the 12 months ended in November. Producer prices for goods rose 0.7% in November and 1.1% for the year. Prices for services ticked up 0.2% in November, marking the fourth consecutive monthly advance. Prices for services rose 3.0% for the year ended in November.
Housing: Sales of existing homes increased 4.8% in November and were up 6.1% from November 2023. The median existing-home price was $406,100 in November, lower than the October price of $406,800 but 4.7% higher than the November 2023 price of $387,800. Unsold inventory of existing homes represented a 3.8-month supply at the current sales pace, down from October (4.2 months) but above the 3.5-month supply in November 2023. Sales of existing single-family homes increased 5.0% in November. Over the 12 months ended in November, sales of existing single-family homes rose 7.4%. The median existing single-family home price was $410,900 in November, down from $411,700 in October but 4.8% above the November 2023 price of $392,200.
New single-family home sales rose in November, however, sales prices have declined. In November, sales rose 5.9% and 8.7% for the year. The median sales price of new single-family houses sold in November was $402,600 ($425,600 in October), down from $429,600 a year earlier. The November average sales price was $484,800 ($525,400 in October), lower than the November 2023 price of $489,000. The inventory of new single-family homes for sale in November represented a supply of 8.9 months at the current sales pace.
Manufacturing: Industrial production declined 0.1% in November following a 0.4% decrease in October. Manufacturing advanced 0.2% in November, driven higher by a 3.1% jump in motor vehicles and parts production. Mining decreased 0.9%, while utilities fell 1.3%. Over the past 12 months ended in November, total industrial production was 0.9% below its year-earlier reading. For the 12 months ended in November, manufacturing decreased 1.0%, utilities advanced 0.1%, while mining declined 1.3%.
New orders for durable goods, down three of the last four months, decreased 1.1% in November. Durable goods orders rose 0.8% in October but fell 1.3% since November 2023. Excluding transportation, new orders decreased 0.1% in November. Excluding defense, new orders declined 0.3%. Transportation equipment, down three of the last four months, led the November decrease, falling 2.9%.
Imports and exports: Import prices rose 0.1% for the second straight month in November, driven higher by advancing fuel prices. Import prices rose 1.3% from November 2023, the largest 12-month increase since the year ended July 2024. Import fuel prices advanced 1.0% in November following a 0.8% decline the previous month. Prices for nonfuel imports were unchanged in November after advancing 0.2% in each of the two previous months. Nonfuel import prices have not declined on a monthly basis since May 2024. Prices for exports were unchanged in November after increasing 1.0% in October. Higher nonagricultural prices in November offset lower agricultural prices. Export prices rose 0.8% over the past year, the largest 12-month advance since the 12-month period ended July 2024.
The international trade in goods deficit was $102.9 billion in November, up $4.6 billion, or 4.7%, from October. Exports of goods were $176.4 billion in November, $7.4 billion more than October exports. Imports of goods were $279.2 billion in November, $12.0 billion more than October imports. Over the last 12 months, the goods deficit grew 16.1%. Exports rose 6.1% and imports increased 9.6%.
The latest information on international trade in goods and services, released December 5, is for October and revealed that the goods and services trade deficit was $73.8 billion, a decrease of $10.0 billion, or 11.9%, from the September deficit. October exports were $265.7 billion, $4.3 billion, or 1.6% less than September exports. October imports were $339.6 billion, $14.3 billion, or 4.0% less than September imports. Year to date, the goods and services deficit increased $80.7 billion, or 12.3%, from the same period in 2023. Exports increased $94.0 billion, or 3.7%. Imports increased $174.7 billion, or 5.4%.
International markets: World stocks are on pace for a second consecutive annual gain of 16%, despite tensions in the Middle East, the ongoing war in Ukraine, Germany’s underperforming economy amidst political upheaval, the downgrade of France’s credit rating, and China’s economic slowdown. For 2024, the STOXX Europe 600 Index rose 6.0%; the United Kingdom’s FTSE advanced 5.7%; Japan’s Nikkei 225 Index gained 10.2%; and China’s Shanghai Composite Index increased 12.7%.
Consumer confidence: December saw consumer confidence wane, ending the year on a down note. The Conference Board Consumer Confidence Index® decreased in December to 104.7 following a 112.8 reading in November. The Present Situation Index, based on consumers’ assessment of current business and labor market conditions, fell 1.2 points to 140.2 in December. The Expectations Index, based on consumers’ short-term outlook for income, business, and labor market conditions, tumbled 12.6 points to 81.1 in December just above the threshold of 80.0 that usually signals a recession ahead.
Eye on the Year Ahead
Looking forward to 2025, several questions arise. The federal funds rate was reduced by 100 basis points in 2024. What impact will lower interest rates have on the economy, labor, and consumer prices? If the incoming administration moves toward deregulation, how will that affect the concentration of economic strength and will it promote more widespread income disparities? Will the conflicts in the Middle East continue into 2025, and if so, what impact will they have on crude oil production? Will increased import tariffs drive consumer prices higher and/or strengthen domestic businesses? These are just a few of the many issues to consider entering the new year.
The Markets (as of market close December 27, 2024)
Christmas week saw stocks climb higher, despite a tumble last Friday. Each of the benchmark indexes listed here posted gains, led by the Global Dow and the NASDAQ. Scant holiday trading amplified market moves during the week. Information technology led the market sectors, with health care, communication services, utilities, financials, and energy also outperforming. Bond values receded, pushing yields higher. The dollar edged up, while gold prices ticked lower. Crude oil prices gained after falling the previous week.
A surge in tech shares helped drive stocks generally higher last Monday. The NASDAQ led the benchmark indexes listed here, climbing 1.0%, followed by the S&P 500 (0.7%), the Global Dow (0.4%), and the Dow (0.2%). The small caps of the Russell 2000 dipped 0.2%. The yield on 10-year Treasuries rose 7.5 basis points to 4.59%. Crude oil prices inched up 0.2% to settle at $69.59 per barrel. The dollar gained 0.4%, while gold prices fell 0.7%.
A “Santa Claus rally” saw stocks move higher on Christmas Eve. Megacaps led the surge, propelling the NASDAQ up 1.4%, while the S&P 500 advanced 1.1%, the Russell 2000 climbed 1.0%, the Dow rose 0.9%, and the Global Dow added 0.7%. Ten-year Treasury yields were unchanged from the prior day, closing at 4.59%. Crude oil prices gained 1.2% to reach $70.10 per barrel. The dollar and gold prices gained 0.2% and 0.3%, respectively.
Stocks moved very little last Thursday during a light day of trading. The Russell 2000 was the only index listed here that made a noticeable move after gaining 0.9%, while the Global Dow inched up 0.2%. The NASDAQ, the S&P 500, and the Dow each moved less than 0.1%. Ten-year Treasury yields slipped to 4.57%. Crude oil prices fell 0.8% to close at $69.55 per barrel. The dollar ticked down 0.1%, while gold prices gained 0.7%.
Last Friday saw stocks tumble, rocked by a late-week megacap swoon. The Russell 2000 lost 1.6%, the NASDAQ declined 1.5%, the S&P 500 fell 1.1%, the Dow dropped 0.8%, and the Global Dow slipped 0.1%. Ten-year Treasury yields inched up to 4.61%. The dollar dipped 0.1%, while gold prices fell 0.8%.
Stock Market Indexes
Market/Index
2023 Close
Prior Week
As of 12/27
Weekly Change
YTD Change
DJIA
37,689.54
42,840.26
42,992.21
0.35%
14.07%
Nasdaq
15,011.35
19,572.60
19,722.03
0.76%
31.38%
S&P 500
4,769.83
5,930.85
5,970.84
0.67%
25.18%
Russell 2000
2,027.07
2,242.37
2,244.59
0.10%
10.73%
Global Dow
4,355.28
4,844.06
4,897.69
1.11%
12.45%
fed. funds target rate
5.25%-5.50%
4.25%-4.50%
4.25%-4.50%
0 bps
-100 bps
10-year Treasuries
3.86%
4.52%
4.61%
9 bps
75 bps
US Dollar-DXY
101.39
107.82
108.02
0.19%
6.54%
Crude Oil-CL=F
$71.30
$69.49
$70.28
1.14%
-1.43%
Gold-GC=F
$2,072.50
$2,641.80
$2,632.50
-0.35%
27.02%
Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.
Last Week’s Economic News
New orders for long-lasting goods decreased 1.1% in November following an 0.8% increase in October. Excluding transportation, new orders decreased 0.1%. Excluding defense, new orders decreased 0.3%. Transportation equipment, down three of the last four months, led the overall decrease, declining 2.9%. New orders for nondefense capital goods in November decreased 0.6%. New orders for defense capital goods in November declined 12.5%.
November saw sales of new single-family homes increase 5.9% from the previous month and 8.7% above the November 2023 rate. The median sales price of new houses sold in November 2024 was $402,600. The average sales price was $484,800. The inventory of new houses for sale at the end of November represented a supply of 8.9 months at the current sales rate.
The international trade in goods deficit rose 4.7% in November. Exports increased 4.4% and imports advanced 4.5%. Since November 2023, the international trade in goods deficit increased by 16.1%. During that period, exports rose 6.1% and imports advanced 9.6%.
The national average retail price for regular gasoline was $3.024 per gallon on December 23, $0.008 per gallon above the prior week’s price but $0.092 per gallon less than a year ago. Also, as of December 23, the East Coast price ticked down $0.046 to $2.945 per gallon; the Midwest price increased $0.051 to $2.935 per gallon; the Gulf Coast price rose $0.085 to $2.647 per gallon; the Rocky Mountain price gained $0.048 to $2.887 per gallon; and the West Coast price decreased $0.010 to $3.775 per gallon.
For the week ended December 21, there were 219,000 new claims for unemployment insurance, a decrease of 1,000 from the previous week’s level. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended December 14 was 1.3%, an increase of 0.1 percentage point from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended December 14 was 1,910,000, an increase of 46,000 from the previous week’s level, which was revised down by 10,000. This is the highest level for insured unemployment since November 13, 2021, when it was 1,974,000. States and territories with the highest insured unemployment rates for the week ended December 7 were New Jersey (2.4%), California (2.2%), Alaska (2.1%), Minnesota (2.1%), Washington (2.1%), Rhode Island (2.0%), Puerto Rico (1.9%), Massachusetts (1.8%), Illinois (1.7%), Montana (1.7%), Nevada (1.7%), New York (1.7%), and Pennsylvania (1.7%). The largest increases in initial claims for unemployment insurance for the week ended December 14 were in Nebraska (+392), Kentucky (+378), Colorado (+169), Rhode Island (+141), and Delaware (+98), while the largest decreases were in New York (-6,807), Texas (-5,405), California (-5,279), Pennsylvania (-4,724), and Georgia (-4,662).
Eye on the Week Ahead
This is expected to be a slow week in the market and for important economic data. The manufacturing purchasing managers’ survey for December is available this week. The manufacturing sector has been slowly picking up steam heading into the new year. It is possible that the December purchasing managers’ index will actually show growth, which hasn’t happened in quite some time.
The Markets (as of market close December 20, 2024)
Despite a late-week rally, stocks tumbled lower last week as Wall Street appears to be limping into the new year. Each of the benchmark indexes lost value, with the Russell 2000 falling nearly 4.5%. For much of the week, investors seemed to move from risk, particularly in light of the Federal Reserve’s revised projection of fewer interest rate reductions in 2025. The decline in equities was broad-based, with each of the market sectors ending the week in the red, with real estate, energy, and materials falling the furthest. Bond yields reached a near seven-month high. Crude oil prices declined on concerns over waning demand. The dollar reached a two-year high earlier in the week, while gold prices ended the week lower.
Wall Street saw the week before Christmas get off to a rousing start. Tech stocks boosted the market prior to the Federal Reserve’s upcoming meeting. The NASDAQ gained 1.2%, the Russell 2000 added 0.7%, and the S&P 500 climbed 0.4%. The Dow and the Global Dow each fell 0.3%. Yields on 10-year Treasuries slipped minimally to 4.39%. Crude oil prices fell 1.0% to settle at $70.58 per barrel. The dollar and gold prices declined 0.1% and 0.2%, respectively.
Stocks could not maintain the momentum garnered from the prior day as each of the benchmark indexes listed here lost value, led by the Russell 2000, which declined 1.2%. The Dow declined 0.6%, marking its ninth straight loss, which is its longest losing streak since 1978. The Global Dow fell 0.5%, while the S&P 500 and the NASDAQ dipped 0.4% and 0.3%, respectively. Ten-year Treasury yields remained at 4.39%. Crude oil prices fell to $70.20 per barrel. The dollar inched up 0.1%, while gold prices dropped 0.3%.
Stocks plunged last Wednesday as investor sentiment was dampened following news that the Federal Reserve projected fewer interest rate cuts in 2025 than previously suggested (see below). The Russell 2000 fell 4.4%, followed by the NASDAQ (-3.6%), the S&P 500 (-3.0%), the Dow (-2.6%), and the Global Dow (-2.1%). Ten-year Treasury yields gained nearly 11.0 basis points to reach 4.49%. Crude oil prices dipped to $70.00 per barrel. The dollar gained 1.0%, while gold prices declined 2.0%.
The Dow barely eked out a gain last Thursday to end its longest losing streak in 50 years. Stocks generally slid lower for the second straight session. The Global Dow declined 1.0% and the Russell 2000 lost 0.4%, while the S&P 500 and the NASDAQ each dipped 0.1%. Long-term bond values followed Wednesday’s decline by falling again on Thursday, lifting 10-year Treasury yields up 7.6 basis points to 4.57%. Crude oil prices slid 1.0%, settling at about $69.85 per barrel. The dollar advanced for the third consecutive day, while gold prices declined for the fourth day in a row.
Stocks bounced back last Friday as the latest inflation data came in slightly below expectations (see below). The Dow gained 1.2%, the S&P 500 rose 1.1%, the NASDAQ advanced 1.0%, and the Russell 2000 climbed 0.9%. The Global Dow advanced 0.6%. Ten-year Treasury yields fell 4.6 basis points. Crude oil prices ticked up 0.1%. The dollar fell 0.6%, while gold prices gained 1.3%.
Stock Market Indexes
Market/Index
2023 Close
Prior Week
As of 12/20
Weekly Change
YTD Change
DJIA
37,689.54
43,828.06
42,840.26
-2.25%
13.67%
Nasdaq
15,011.35
19,926.72
19,572.60
-1.78%
30.39%
S&P 500
4,769.83
6,051.09
5,930.85
-1.99%
24.34%
Russell 2000
2,027.07
2,346.90
2,242.37
-4.45%
10.62%
Global Dow
4,355.28
4,991.65
4,844.06
-2.96%
11.22%
fed. funds target rate
5.25%-5.50%
4.50%-4.75%
4.25%-4.50%
-25 bps
-100 bps
10-year Treasuries
3.86%
4.39%
4.52%
13 bps
66 bps
US Dollar-DXY
101.39
106.98
107.82
0.79%
6.34%
Crude Oil-CL=F
$71.30
$71.11
$69.49
-2.28%
-2.54%
Gold-GC=F
$2,072.50
$2,666.90
$2,641.80
-0.94%
27.47%
Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.
Last Week’s Economic News
The Federal Reserve cut interest rates by 25.0 basis points, the third rate cut this year, while projecting two more rate cuts for 2025, which is fewer than previously indicated. In support of its decision, the Fed noted that the economy has expanded at a solid pace, labor conditions have eased, and inflation has progressed toward the Fed’s 2.0% target objective, although it remained somewhat elevated. According to Fed Chair Jerome Powell, the central bank may proceed at a slower pace, partly because it has already lowered rates substantially and also due to the uncertain path inflation may take, coupled with potential policy changes under President-elect Trump.
The personal consumption expenditures (PCE) price index ticked up 0.1% in November following 0.2% increases in both September and October. Excluding food and energy, the PCE price index rose 0.1%. Since November 2023, prices rose 2.4%. Excluding food and energy, prices increased 2.8%. It appears that price volatility in food and energy costs is the primary contributor to the overall increase in consumer prices. Personal income and disposable (after-tax) personal income each rose 0.3% last month. Personal consumption expenditures, a measure of consumer spending, rose 0.4% in November.
According to the third and final estimate, gross domestic product advanced 3.1% in the third quarter, 0.1 percentage point above the estimate for the second quarter. The increase in GDP primarily reflected increases in consumer spending (3.7%), exports (9.6%), nonresidential fixed investment (4.0%), and federal government spending (8.9%). Imports, which are a negative in the calculation of GDP, increased to 10.7%. The personal consumption expenditures (PCE) price index increased 1.5%, the same as previously estimated. Excluding food and energy prices, the PCE price index increased 2.2%. Gross domestic income (GDI) increased 2.1% in the third quarter, a downward revision of 0.1 percentage point from the previous estimate. The average of GDP and GDI, a supplemental measure of U.S. economic activity that equally weights GDP and GDI, increased 2.6% in the third quarter.
Retail sales rose 0.7% in November and 3.8% over the last 12 months. Retail trade sales were up 0.9% last month and 4.1% from last year. The November increase in retail sales was largely attributable to a 2.6% advance in sales from motor vehicle & parts dealers and a 1.8% increase in nonstore (online) retail sales. Food & beverage store sales (including grocery store sales) declined 0.2% in November. For the year, nonstore retail sales rose 9.8%, motor vehicle & parts dealers sales increased 6.5%, sales from food & beverage stores advanced 1.8%, department store sales increased 1.4%, while gasoline station sales fell 3.9%.
Industrial production moved down 0.1% in November after declining 0.4% in October. In November, manufacturing output rose 0.2%, boosted by a 3.5% increase in the index for motor vehicles and parts. The indexes for mining and utilities fell 0.9% and 1.3%, respectively. Total industrial production in November was 0.9% below its year-earlier level. Capacity utilization stepped down to 76.8% in November, a rate that is 2.9 percentage points below its long-run (1972-2023) average.
The number of issued residential building permits rose 6.1% in November but were 0.2% below the November 2023 rate. Issued building permits for single-family homes ticked up 0.1% last month but were 2.7% under the estimate from a year earlier. Housing starts declined 1.8% in November and 14.6% below the November 2023 estimate. Single-family housing starts were 6.4% above the prior month’s total but 10.2% under the November 2023 figure. Housing completions in November were 1.9% below the October estimate but were 9.2% above the November 2023 rate. Single-family housing completions in November were 3.3% above the October rate and 7.0% above the estimate from a year ago.
Existing home sales grew by 4.8% in November from the prior month. Over the last year, sales of existing homes rose 6.1%. Unsold inventory sat at a 3.8-month supply last month, down from 4.2 months in October but up from 3.5 months in November 2023. The median existing home price in November was $406,100, down marginally from the October estimate ($406,800) but up 4.7% from one year ago ($387,800). Single-family home sales increased 5.0% in November and 7.4% from November 2023. The median existing single-family home price was $410,900 in November, down from $411,700 in October but up 4.8% from November 2023 ($392,200). According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.6% as of December 12. That’s down from 6.69% one week ago and 6.95% one year ago.
The national average retail price for regular gasoline was $3.016 per gallon on December 16, $0.008 per gallon above the prior week’s price but $0.037 per gallon less than a year ago. Also, as of December 16, the East Coast price ticked down $0.008 to $2.991 per gallon; the Midwest price increased $0.076 to $2.884 per gallon; the Gulf Coast price fell $0.041 to $2.562 per gallon; the Rocky Mountain price rose $0.053 to $2.839 per gallon; and the West Coast price decreased $0.042 to $3.785 per gallon.
For the week ended December 14, there were 220,000 new claims for unemployment insurance, a decrease of 22,000 from the previous week’s level. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended December 7 was 1.2%, unchanged from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended December 7 was 1,874,000, a decrease of 5,000 from the previous week’s level, which was revised down by 7,000. States and territories with the highest insured unemployment rates for the week ended November 30 were New Jersey (2.5%), California (2.3%), Washington (2.2%), Alaska (2.1%), Minnesota (2.1%), Rhode Island (1.9%), Nevada (1.8%), Puerto Rico (1.8%), Illinois (1.7%), Massachusetts (1.7%), Montana (1.7%), New York (1.7%), Oregon (1.7%), and Pennsylvania (1.7%). The largest increases in initial claims for unemployment insurance for the week ended December 7 were in California (+14,411), Texas (+10,011), New York (+8,926), Illinois (+7,426), and Georgia (+6,119), while the largest decreases were in North Dakota (-788) and Delaware (-163).
Eye on the Week Ahead
There isn’t much in the way of important economic data during Christmas week, and trading customarily slows down. The report on the manufacture of durable goods for November is worth noting. New orders for durable goods are indicative of how busy factories will be in the coming months. In October, new orders rose 0.2%, driven mostly by a bump in transportation.
The Markets (as of market close December 13, 2024)
Stocks pulled back last week as tech shares pared gains from the prior week. The NASDAQ posted a minimal gain, while the S&P 500 retreated from recent record highs. Nine of the 11 market sectors declined last week, with only consumer discretionary and communication services advancing. Investors will be paying close attention to the Federal Open Market Committee, which meets December 17-18, at which time the Committee will have to decide if the recent uptick in price inflation is sufficient to defer another interest rate cut. While the November Consumer Price Index and Producer Price Index came in as expected (see below), data from both sources showed inflationary pressures moved further away from the Fed’s 2.0% target. This trend, coupled with a solid labor market, opens the possibility that the Committee may decide to wait until the January 2025 meeting before considering a further interest rate reduction. Nevertheless, the consensus remains that the Fed will reduce the federal funds rate by 25.0 basis points when it meets this week. Crude oil prices rose to their highest levels in three weeks, buoyed by expectations of an increase in demand following China’s economic stimulus and potential supply disruptions resulting from U.S. sanctions on Iran and Russia.
Wall Street saw stocks trend lower to kick off last week. Each of the benchmark indexes listed here lost value. The NASDAQ, the Russell 2000, and the S&P 500 each fell 0.6%. The Dow lost 0.5%, and the Global Dow dipped 0.2%. A Chinese government antitrust probe into a major AI company saw its shares tumble, which led a retreat in tech stocks. Investors also may have been reticent about risk pending the upcoming inflation data and next week’s Federal Reserve meeting. The yield on 10-year Treasuries rose 4.8 basis points to 4.20%. Crude oil prices advanced to $68.11 per barrel. The dollar gained 0.1%, and gold prices climbed 0.8%.
Stocks continued to slide last Tuesday as investors awaited the upcoming Consumer Price Index report. The Global Dow fell 0.5%, while the Russell 2000 lost 0.4%. The NASDAQ, the S&P 500, and the Dow each declined 0.3%. Ten-year Treasury yields climbed to 4.22%. Crude oil prices, at $68.38 per barrel, changed marginally. The dollar gained 0.3%, while gold prices rose 1.2%.
Following two days of losses, stocks climbed higher last Wednesday, led by a jump in tech shares, while stocks in communication services and consumer discretionary also trended higher. The NASDAQ gained 1.8% to reach a record high. The S&P 500 climbed 0.8%, the Russell 2000 advanced 0.6%, and the Global Dow rose 0.2%. The Dow slipped 0.2%. Bond prices fell, pushing yields higher, with 10-year Treasuries advancing to 4.27%. Crude oil prices surged 2.5% to $70.31 per barrel as supply concerns increased following the European Union’s approval of sanctions against Russian oil exports. The dollar rose 0.3%, and gold prices moved up 1.3%.
Last Thursday, a jump in producer prices (see below) and unemployment claims (see below) cooled investors’ appetite for risk. The Russell 2000 fell 1.4%. The NASDAQ slid 0.7%, the Dow and the S&P 500 dropped 0.5%, and the Global Dow dipped 0.3%. Ten-year Treasury yields gained 5.3 basis points to close at 4.32%. Crude oil prices declined 0.3% to settle at $70.08 per barrel. The dollar gained 0.3%, while gold prices fell 1.9%.
Stocks closed mostly lower last Friday, with only the NASDAQ ticking up 0.1%. The S&P 500 was unchanged, while the Russell 2000 dropped 0.6%, and both the Dow and the Global Dow fell 0.2%. Yields on 10-year Treasuries gained 7.5 basis points. Crude oil prices ended an up-and-down week by climbing 1.7%. The dollar was flat, while gold prices fell 1.6%.
Stock Market Indexes
Market/Index
2023 Close
Prior Week
As of 12/13
Weekly Change
YTD Change
DJIA
37,689.54
44,642.52
43,828.06
-1.82%
16.29%
Nasdaq
15,011.35
19,859.77
19,926.72
0.34%
32.74%
S&P 500
4,769.83
6,090.27
6,051.09
-0.64%
26.86%
Russell 2000
2,027.07
2,408.99
2,346.90
-2.58%
15.78%
Global Dow
4,355.28
5,041.08
4,991.65
-0.98%
14.61%
fed. funds target rate
5.25%-5.50%
4.50%-4.75%
4.50%-4.75%
0 bps
-75 bps
10-year Treasuries
3.86%
4.15%
4.39%
24 bps
53 bps
US Dollar-DXY
101.39
105.98
106.98
0.94%
5.51%
Crude Oil-CL=F
$71.30
$67.15
$71.11
5.90%
-0.27%
Gold-GC=F
$2,072.50
$2,653.80
$2,666.90
0.49%
28.68%
Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.
Last Week’s Economic News
The Consumer Price Index posted the largest gain in seven months after climbing 0.3% in November. For the 12 months ended in November, the CPI advanced 2.7%, up 0.1 percentage point from the comparable period ended in October. Core prices, excluding the more volatile food and energy prices, also advanced 0.3% last month and 3.3% over the last 12 months. Food prices increased 0.4% last month, driven by a 0.5% jump in prices for food at home. For the year, prices for food advanced 2.4%. Energy prices rose 0.2% in November but declined 3.2% over the last 12 months. Other categories that saw price increases in November include shelter, used cars and trucks, household furnishings and operations, medical care, new vehicles, and recreation. Prices for communication were among the few major categories that decreased over the month. Shelter costs rose 0.3% for the month and 4.7% for the year. While the latest increases in shelter costs showed some moderation, at nearly 40% of the total basket of goods and services, shelter costs continue to keep the CPI above the Federal Reserve’s 2.0% target.
Prices at the wholesale level rose 0.4% in November, according to the latest Producer Price Index. Prices increased 0.3% (revised) the prior month. For the 12 months ended in November, producer prices advanced 3.0%, up 0.8 percentage point from the 12-month period ended in October. This was the largest 12-month increase since prices rose 4.7% for the year ended in February 2023. According to the Bureau of Labor Statistics, nearly 60.0% of the increase in the November PPI was attributable to a 0.7% increase in prices for goods. Prices for services moved up 0.2%. Food prices jumped 3.1% last month after being flat in October and have risen 5.1% since November 2023. Prices less food and energy increased 0.2% last month and 3.4% for the year. Prices less food, energy, and trade services inched up 0.1% in November and 3.5% for the last 12 months.
The Treasury budget deficit for November was $367 billion, well above the October estimate and $53 billion more than the deficit from last November. Contributing to the November deficit were outlays for military active duty and retirement, veterans benefits, Supplemental Security Income, and Medicare payments to health maintenance organizations and prescription drug plans, which accelerated into November, because December 1, 2024, the normal payment date, fell on a non-business day. According to the Department of the Treasury report, November has been a deficit month 70 out of 71 fiscal years. Through the first two months of fiscal year 2025, the cumulative deficit is $624 billion.
Prices for imports increased 0.1% for the second consecutive month in November and 1.3% over the last 12 months, the largest one-year advance since the period ended July 2024. After declining 0.8% in October, import fuel prices rose 1.0% in November, greatly contributing to the overall increase in import prices. Import prices excluding fuel were unchanged in November. Export prices were unchanged in November after increasing 1.0% the previous month. Higher nonagricultural prices in November offset lower agricultural prices. Export prices rose 0.8% over the past year, the largest 12-month advance since a 1.2% increase from July 2023 to July 2024.
The national average retail price for regular gasoline was $3.008 per gallon on December 9, $0.026 per gallon below the prior week’s price and $0.128 per gallon less than a year ago. Also, as of December 9, the East Coast price ticked up $0.010 to $2.999 per gallon; the Midwest price decreased $0.094 to $2.808 per gallon; the Gulf Coast price rose $0.022 to $2.603 per gallon; the Rocky Mountain price declined $0.001 to $2.786 per gallon; and the West Coast price decreased $0.036 to $3.827 per gallon.
For the week ended December 7, there were 242,000 new claims for unemployment insurance, an increase of 17,000 from the previous week’s level, which was revised up by 1,000. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended November 30 was 1.2%, unchanged from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended November 30 was 1,886,000, an increase of 15,000 from the previous week’s level. States and territories with the highest insured unemployment rates for the week ended November 23 were New Jersey (2.2%), Alaska (2.0%), Washington (2.0%), California (1.8%), Puerto Rico (1.8%), Rhode Island (1.8%), Minnesota (1.7%), Nevada (1.7%), Massachusetts (1.6%), and New York (1.6%). The largest increases in initial claims for unemployment insurance for the week ended November 30 were in Wisconsin (+1,785), North Dakota (+1,004), Kentucky (+731), Pennsylvania (+642), and Iowa (+252), while the largest decreases were in California (-10,113), Texas (-5,996), Florida (-2,373), Georgia (-2,239), and New York (-1,946).
Eye on the Week Ahead
The Federal Reserve meets for the last time this year. Many expect the Fed to drop interest rates by 25.0 basis points. The third and final estimate of gross domestic product for the third quarter is also out this week. The last reading had the economy expanding at an annualized rate of 2.8%.
What I'm Watching This Week 