Volatility rose amid relatively thin year-end trading this week. US stock markets opened 2025 pulling back further from the selling seeing in late December. The NASDAQ remained heavy as traders rotated away from some of 2024’s equity darlings into fixed income and other areas. The US dollar remained strong with the Euro dipping below 1.03 for first time since late 2022. Equity price action improved into Friday as US Treasury yields stabilized after the December ISM manufacturing and prices paid topped estimates. Also on Friday, Republicans in the House passed their first test of their ability to govern, reelecting Mike Johnson as Speaker of the House in the second round of voting. Natural gas prices surged early in the week ahead of a polar vortex forecasted to hit the eastern half of the US, but prices backed off later on into weekly inventory readings. Separately, China economic readings remained disappointing. Chinese 10 and 30-year bond yields fell to fresh record lows along with the Yuan while PBOC officials vowed to cut both bank reserves and rates in 2025 as part of a “policy overhaul”. Stocks slid in the first part of the week, leading to a 0.5% decline in S&P and Nasdaq, while the DJIA fell 0.6% over the four day week.
On Monday Boeing shares dove as much as 5% following Sunday’s crash of a 737 in which a landing gear issue may have been a contributing factor. Tesla reported record Q4 delivery numbers, but they still fell far short of expectations, and annual deliveries fell for first time since 2011 and came in below Wall Street estimates, weighing on shares. The US Surgeon General reportedly plans on adding a cancer warning to alcohol labels resulting pockets of discretionary weakness on Friday. In M&A news, the Nippon/US Steel deal was officially blocked by the White House after CFIUS was unable to reach a consensus decision. Also Getty and Shutterstock saw share surge on a report that they are contemplating a merger.
MON 12-30
(AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: v 83.9 prior [last reading from 2 weeks ago]
(BR) Brazil Central Bank Weekly Economists Survey
(CH) Swiss weekly Total Sight Deposits (CHF): 445.7B v 456.5B prior
(CN) CHINA DEC MANUFACTURING PMI (GOVT OFFICIAL): 50.1 V 50.2E (3rd month of expansion)
(ES) SPAIN DEC PRELIMINARY CPI M/M: 0.4% V 0.2%E; Y/Y: 2.8% V 2.6%E (highest since July)
(EU) European Economic Schedule for Mon, Dec 30th 2024
(EU) European Economic Schedule for Mon, Dec 30th 2024
(IL) Israel reportedly preparing to fight on a new front against Houthi militants in Yemen; Israeli official says Houthis “are more technologically advanced than perceived by many” and should not be “underrated” - WaPo (update)
(US) Association of American Railroads weekly rail traffic report for week ending Dec 21st 523.9K total units, +7.8% y/y (update)
(US) Citi End-Dec Economic Surprise Index drops to 3.2 v 30.0 m/m (lowest since Sept and down from 43.3 just five weeks ago)
(US) US Treasury: Notified on Dec 8th that workstations were hacked in cyberattack by China – press
(US) US Treasury: Notified on Dec 8th that workstations were hacked in cyberattack by China – press
(US) DEC DALLAS FED MANUFACTURING ACTIVITY: 3.4 V -3.0E
(US) Association of American Railroads weekly rail traffic report for week ending Dec 21st 523.9K total units, +7.8% y/y (update)
(US) NOV PENDING HOME SALES M/M: 2.2% V 0.8%E; Y/Y: 5.6% v 7.9%E
ATHR Files to sell 1.8M IPO shares at $4.00-5.00/shr – filing
IONQ IonQ and Oak Ridge National Laboratory unveil novel approach to scalable Quantum computing, note step forward in scaling quantum computing systems for practical commercial applications; Enables near-optimal and optimal solutions for complex combinatorial optimization problems on IonQ's commercially available hardware; IonQ and ORNL were able to reduce the number of two-qubit gates by over 85% for a 28 qubit problem compared to a QAOA (Quantum Approximate Optimization Algorithm) solution
TUES 12-31
(RU) Russian gas exports via Ukraine to halt on Jan 1st, as expected [Transit nomination point at Sudzha, Ukraine, received no nominations as of 3:00pm GMT; Usually receives next-day nominations of ~42M cubic meters]
BABA Alibaba Cloud cuts LLM prices by >80% to ¥0.0015 per 1,000 tokens (lowest rate in industry)
MAERSKB.DK Exec: Sees no progress on US port strike talks; Urges removal of cargo - press interview
X Reportedly Nippon Steel offered new proposal to White House on US Steel deal; To give US veto over US steel capacity cuts, in last ditch attempt to have deal approved – press
WEDS 1-1
(CN) CHINA DEC CAIXIN PMI MANUFACTURING: 50.5 V 51.7E (3rd month of expansion)
(SG) SINGAPORE Q4 ADVANCE GDP Q/Q: +0.1% V -0.8%E; Y/Y: 4.3% V 3.8%E
(US) Follow up: US Treasury Sanctions Office also reportedly hacked by China [timing of the hack is not certain] - Washington Post
THRS 1-2
(CN) China PBOC said to plan "policy overhaul" as pressure mounts on economy; cites comments from the PBOC; Would prioritise focus on adjusting interest rates over 'quantitative objectives' for loan growth, aligning with the Western central banks - FT
(CN) China Securities Regulator (CSRC) denies earlier rumors and vows to fight against stock market rumors – press
(US) Outgoing Pres Biden discussed plans to strike Iran nuclear sites if Tehran sped nuclear goals to develop bomb – press
(EU) ECB's Stournaras (Greece): Sees rates falling to ~2% around autumn 2025 - press interview [**Note: implies four 25bps rate cuts v current deposit rate of 3.00%]
(IT) ITALY DEC MANUFACTURING PMI: 46.2 V 45.0E (9th month of contraction); Notes the pace of job shedding was the second-fastest since July 2020
(US) DOE CRUDE: -1.18M V -2.4ME; GASOLINE: +7.72M V -0.3ME; DISTILLATE: +6.41M V +0.1ME
(US) DEC FINAL S&P MANUFACTURING PMI: 49.4 V 48.3E
(US) Reportedly leaders from a US dockworkers’ union and the group that represents their employers are set to resume contract talks on next Tue, Jan 7th - press [**Note: in early Oct, United States Maritime Alliance (USMX) agreed to suspend strike and extend contract until Jan 15th 2025]
(US) INITIAL JOBLESS CLAIMS: 211K V 221KE (8-month low); CONTINUING CLAIMS: 1.844M V 1.89ME
CART Announces multi-year partnership with Samsung that uses AI to replenish groceries
CEG Reaches >$1B deal with US govt to supply power to agencies; $840M for electricity supplies and $172M for energy services from April 2025
FUL Reports prelim FY24 adj $3.84 v $4.17e, Rev $3.57B v $3.58Be, cuts EBITDA $594M (prior $610-620M); Negative inflection seen late in Q4
STARLINK.IPO China's Chang Guang Satellite Technology Co, reportedly beats Starlink to hi-res space-ground laser transmission at 6G standard; China's commercial satellite company sets 100Gbps speed record; 10 times faster than its previous feat less than a year earlier – SCMP
TSLA Reports Q4 deliveries 495.6K v 512Ke, 462.9K q/q, (484.5K y/y); production 459.4K v 505Ke, -2.2% y/y (record deliveries)
FRI 1-3
(US) Two US House Republicans switch votes to support Speaker Johnson, giving him enough votes to retain the position in the 119th Congress
(US) DEC ISM MANUFACTURING: 49.3 V 48.2E
(US) WEEKLY EIA NATURAL GAS INVENTORIES: -116 BCF VS. -123 BCF TO -125 BCF INDICATED RANGE
(US) Cleveland Fed’s Inflation Nowcast forecasting Dec US CPI Y/Y (to be out on Jan 15th) to accelerate again to 2.9% from 2.7%; Then, forecasting Jan US CPI Y/Y (to be out next month) to stay roughly unchanged from Dec forecast at 2.9%
(US) Atlanta Fed GDPNow: Cuts Q4 GDP forecast from 2.6% to 2.4%
(US) Citi Early Jan Economic Surprise Index drops to -0.5 v +30.0 m/m (lowest since early autumn and down from 43.3 just five weeks ago)
(DE) GERMANY DEC UNEMPLOYMENT CHANGE: +10.0K V +15.0KE; UNEMPLOYMENT CLAIMS RATE: 6.1% V 6.2%E
(US) US Surgeon General calls for cancer warnings on alcohol labels
MSFT Expects to spend $80B on AI data centers in 2025 - blog post
GETY Getty said to explore merger with Shutterstock - press