After a strong performance on Christmas Eve, the stock market had a quiet session on Thursday as mixed data for jobless claims provided little impetus to make significant moves.
While the S&P 500 managed to claw back some earlier losses, it struggled to gain significant traction due to low trading volume caused by closures on major European markets.
This quiet session reflects the market taking a break before the end of the year, and now looking forward to the potential volatility in the new year.
The market is now focused on 2025
Wall Street has largely ignored the latest economic readings. This included an increase in the number of recurring applications for US unemployment benefit to a three-year peak, indicating it takes longer for unemployed people to find new jobs.
Initial claims for unemployment fell to 219,000 in the week ending December 21st.
Kenny Polcari, SlateStone Wealth, told Bloomberg that “Eco data will be a non-event as we enter the new year.” Christmas is over, but we are about to enter the New Year. “Volumes will remain muted.”
This sentiment reflects the shift in market focus from current economic data towards future prospects and possible risks.
Year-end rally, or January volatility?
Analysts have differing opinions on the market’s future trajectory, but the market is showing strength.
Jonathan Krinsky, BTIG, believes that the S&P 500 will continue to rise into the year-end. It could even reach a new high of 6,100. However, he also predicts that volatility is likely to return in January.
Krinsky told Bloomberg that “if the S&P 500 makes new highs, then there will be massive divergences of breadth and momentum. This is another red flag when we get to January.”
This observation suggests the current rally may be masking underlying weakness in the market.
Megacaps mixed and GameStop surges – a look at the market movers
The S&P 500 hovered around 6,035, the Nasdaq fell 0.1% and the Dow Jones Industrial Average was largely unchanged.
Apple Inc. outperformed the rest of the megacap stocks after Wedbush’s bullish note.
GameStop Corp. – a meme stock favorite – rallied following a X post by Keith Gill, also known under the name Roaring Kitty.
These movements are a reflection of the current dynamics in the market. They highlight both established players as well as those who are driven by retail interest.
Bitcoin falls, dollar increases, Treasury yields fall
The yield on the 10-year Treasury fell two basis points to 4.57 %.
The Bloomberg Dollar Spot Index also rose by 0.1%.
Bitcoin fell in the cryptocurrency market as traders reduced their exposure to risk following a record-breaking rally, reflecting the Fed’s cautious approach towards speculative investment.
Analyst upgrades and strategic moves
Alibaba Group Holding Ltd. has announced an agreement merging its South Korean operations with E-Mart Inc.’s e-commerce platforms, in order to improve their competition in the country’s online retail sector.
Raymond James upgraded Progressive Corp. to outperform, from market perform. The company’s “long term record of growth and creation of value” was cited as a reason why it should be considered by large-cap growth investors to be a core holding.
Key events and Market Data
On Friday, key events include Japan’s Tokyo CPI, unemployment and industrial production data, as well as US goods trade data.
Specific market data shows that the S&P 500 remained largely flat, while the Nasdaq 100 dropped 0.1% and the Dow Jones Industrial Average remained similar.
The Bloomberg Dollar Spot Index rose 0.1% while the euro held steady at $1.0416.
The British pound dropped 0.3% to $1.2521 while the Japanese yen dropped 0.4% to 157.98 dollars.
Bitcoin fell 3.1% on the cryptocurrency market to $95,412.59 and Ether fell by 4.2% to $33,318.68.
The yield on the 10-year Treasuries fell two basis points to 4.57%. Germany’s yield remained unchanged at 2.32%, and Britain’s yield remained unchanged at 4.58%.
West Texas Intermediate crude dropped 0.9% to $69.44 per barrel, while spot-gold rose 0.6% to 2,633.44 per ounce.
This post Wall Street pauses after the holidays: Stocks waver as volumes dips could be modified as new updates are released.
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