Stock Market Today: Major Indexes Rebound Amid Tame Inflation Data
Market Performance and Economic Indicators
On Monday, December 23, 2024, the U.S. stock market demonstrated resilience, rebounding from last week’s losses. The Dow Jones Industrial Average (DJIA) climbed 1.2%, while the S&P 500 and Nasdaq Composite both gained 1.1%. This positive momentum comes after a challenging week where all three major indexes posted losses, snapping the Nasdaq’s four-week winning streak.
The market’s upward movement was largely attributed to the release of tame inflation data. The Personal Consumption Expenditures (PCE) index, the Federal Reserve’s preferred measure of inflation, showed prices edged higher in November, but not as much as economists had predicted. This development has bolstered investor confidence in the Fed’s ability to manage inflation and potentially ease monetary policy in the coming year.
Year-to-Date Performance and Market Outlook
Despite recent volatility, the stock market has shown impressive gains in 2024. Year-to-date, the Dow has risen 13.7%, while the S&P 500 and Nasdaq have surged 24.3% and 30.4%, respectively. However, the market faces challenges as it enters the final trading days of the year, with the S&P 500 currently 2.6% below its record high set earlier this month.
Investors are closely watching for signs of the traditional “Santa Claus rally,” which typically occurs during the last five trading days of December and the first two of January. Historically, the S&P 500 has gained an average of 1.29% during this period, rising 77% of the time since 1950. However, market strategists caution that much of the year-end optimism may have already been priced in during November’s strong performance.
Major Stock Movements and Corporate News
Several notable stocks are making headlines as we approach the end of the year:
1. Tesla (TSLA): The electric vehicle maker’s shares declined 3.5% following news of a recall affecting around 700,000 vehicles in the U.S. due to an issue with tire pressure monitors.
2. FedEx (FDX): The package delivery giant trimmed its full-year revenue guidance and announced plans to separate its freight business, impacting the broader trucking industry.
3. Uber Technologies Inc. (UBER): Despite the overall market rally, Uber has been identified as a potential large-cap laggard with the possibility of surging in the near term.
4. Ryanair Holdings plc (RYAAY): The airline company is another large-cap stock that analysts believe could see significant gains in the coming months.
5. Novartis AG (NVS): The pharmaceutical company continues to show strong momentum, driven by its diverse portfolio and recent label expansions for key drugs.
Upcoming Market Events and Earnings Reports
As we enter the holiday-shortened trading week, investors should keep an eye on a few key events:
1. Anavex Life Sciences Corp. (AVXL) is scheduled to report its Q4 2024 earnings before the market opens on December 23, with an estimated EPS of -$0.17.
2. PagerDuty (PD) will release its earnings report on December 26, with the stock expected to move +/- 9.79% based on options volatility.
3. The stock market will close early at 1 pm Eastern time on December 24 and remain closed on December 25 for Christmas Day.
Market Outlook and Investor Sentiment
As we approach the end of 2024, investor sentiment remains cautiously optimistic. The recent inflation data and the Federal Reserve’s stance on potential interest rate cuts in 2025 have provided some relief to market concerns. However, uncertainties surrounding global economic growth, geopolitical tensions, and the upcoming U.S. presidential election continue to influence market dynamics.
Investors are advised to maintain a diversified portfolio and stay informed about market trends and individual stock performances as we head into the new year. With the potential for both year-end volatility and the possibility of a Santa Claus rally, the final days of 2024 promise to be an interesting time for market watchers and participants alike.
