Weekly Market Commentary December 30th 2024 to January 3rd 2025

Despite a positive trading session on Friday, U.S. equities were unable to pull together a year-end Santa Clause rally in another holiday-shortened week. The S&P 500 was lower by 0.5% for the week, closing at 5,942. The Nasdaq Composite declined 0.5% as well.

The only notable economic data release for the week was ISM Manufacturing, which showed a modest pickup in December. The 49.3 reading was ahead of consensus and the highest since March, but still shy of an expansionary level (north of 50) for a ninth consecutive month. Timothy Fiore, Chairman of the ISM Manufacturing Business Survey Committee, made some bullish statements to the press following the release. He indicated that signs of improving demand, stabilized output and rising backlogs are catalysts he sees for a shift back into expansionary territory within the next two months.

The yield on the 10-year U.S. Treasury was marginally lower on the week by 3 basis points to 4.60%. The week ended with a positive slope on the 2-10 segment of the yield curve of 0.31%.

There are a number of important economic data releases next week including Nonfarm Payrolls, JOLTS job openings, ISM Services and Factory Orders, along with the release of FOMC Meeting Minutes.