The DOW JONES rose 0.79% to 42,878 points, while the S&P 500 rose 0.63% to 5,918 points. The Nasdaq rises 0.56% to 19,418 points.
Wall Street returns to activity after being closed yesterday for the New Year. In their last session, the three major indices closed lower, with the Dow Jones losing 0.07%, compared to 0.43% for the S&P 500 and 0.90% for the Nasdaq.
If you look at 2024 as a whole, the S&P 500 rose 23% last year, while the Dow added almost 13%. Driven by enthusiasm around artificial intelligence and rate cuts, the Nasdaq Composite was the best performer, gaining 29%.
The so-called Magnificent Seven were behind much of the 2024 advance. NVIDIA posted a spectacular 171% gain thanks to the artificial intelligence boom, while iPhone maker Apple rose 30%. But these big gains led to some profit-taking at the end of the year. The S&P 500 recorded four consecutive days of decline to close the year, the first time that has happened since 1966.
All this means that It will be difficult for the long-awaited Santa Claus rally to materializeas the stock’s rise in the last five days of the year and the first two trading days of January is called. The S&P 500 is up 1.3% on average over this period and has finished higher nearly 80% of the time, according to Dow Jones market data dating back to 1950.
On the macroeconomic agenda this Thursday, investors learned the usual weekly data on initial unemployment benefit claims. The number of people who requested state unemployment benefits stood at 211,000 last week, below expectations (222,000)according to data published by the Department of Labor. The previous week’s figure was revised upwards to 220,000, compared to a previous estimate of 219,000.
The four-week moving average of new claims, which is considered a more reliable indication of labor market trends as it reduces spikes in volatility, fell to 223,250.
After the opening, the Manufacturing PMI of December.
It will also be necessary to evaluate how the market reacts to the deadly attack in New Orleans on New Year’s Day that is being investigated as a possible terrorist act. The FBI has noted that the suspect, who drove a truck into a crowd, may not have been “solely responsible” for the attack.
Among the leading companies of the day, the fate of the planned acquisition of US Steel by Nippon Steel depends on the outgoing US president, Joe Biden, who has until January 7 to decide. In an attempt to persuade Biden, the Japanese company has offered to give the US government veto power over any cuts to US Steel’s production capacity, according to Reuters, citing a source familiar with the matter.
Tesla is also the protagonist, which has published its production and delivery data for the fourth quarter that has disappointed the market. Deliveries reached 495,570 in the last part of the year, for a total in 2024 of 1,789,226 vehicles, while production reached 459,445 cars, ending the year at 1,773,443. Shares of the company led by Elon Musk drop 4.3% in the New York morning.
Regarding analyst recommendations, good news for Uber Tech, which sees as Goldman Sachs includes the stock on its buy with conviction list. The company rises 2.5% at the opening of Wall Street.
Cloudflare scores a rise of 6.90% at the opening. Goldman Sachs raises its recommendation of the cybersecurity company two notches, from ‘sell’ to ‘buy’. The firm also nearly doubled its price target, citing “several positive catalysts” heading into 2025, including productivity improvements in sales and marketing and edge computing solutions.
SoFi Technologies falls 2.2% after KBW downgraded it to ‘underweight’ from previous ‘market perform’.
Much of the decline in equities in recent weeks comes from pressure on bond yields, as rate expectations have been adjusted following Trump’s arrival in the White House. Today the yield on the ten-year bond gives a respite, dropping four points to 4.533%. The reference bond experienced a real roller coaster last year, starting below 3.9%, rising to 4.7% in spring, falling again to 3.7% and finally ending 2024 above 4. 5%. The two-year bond pays 4.215%.
In raw materials markets, oil prices start the year with increases, very hopeful of a revival of the Chinese economy after President Xi Jinping promised in his New Year’s speech proactive policies to promote economic growth in China . The Asian giant is the world’s largest importer of crude oil.
US West Texas futures advanced 1.87% to $73.06, while European benchmark Brent futures rose 1.66% to $75.88.
The euro remains in the doldrums against the dollar and falls 0.39% to a cross of 1.0318 dollars for each community currency, after falls of 5.5% last year.