Markets Take a Breather as Year-End Approaches
As the final trading days of 2024 come to a close, US stocks are experiencing a slight downturn. The S&P 500 has dropped approximately 0.8%, while the Nasdaq Composite has shed 1.3%. The Dow Jones Industrial Average has also seen a decline of 0.3%. Meanwhile, the 10-year Treasury yield remains near seven-month highs, hovering around 4.6%.
A Triumphant Year for Stocks
Despite today’s losses, 2024 has been a remarkable year for the markets. The S&P 500 has risen an impressive 26%, while the Nasdaq Composite has surged over 30%. The Dow Jones Industrial Average has seen a more modest gain of 14%. With only three trading days left in the year, investors are hoping for a “Santa Claus” rally to propel the markets even higher.
Airline Stocks Soar
One sector that has particularly excelled this year is the airline industry. The S&P Supercomposite Airlines Index has climbed an astonishing 60%, its biggest yearly gain in a decade. In comparison, the S&P 500 has risen roughly 27% over the same period. Major airlines such as United, Delta, Alaska, and JetBlue have all seen significant gains, with United Airlines leading the pack with a staggering 144% increase.
Looking Ahead to 2025
As investors look to the new year, two key themes are emerging: the Federal Reserve’s path for interest rates and the implications of Donald Trump’s return to the White House. The Fed’s plans to scale back rate cuts next year have been largely absorbed by the markets, with bets now shifting to May as the next meeting at which rates will be slashed. Meanwhile, Trump’s economic plans are expected to face scrutiny from other key power players.
Economic Data and Earnings
In terms of economic data, wholesale inventories for November are due to be released. On the earnings front, there are no notable reports scheduled for today. However, investors will be keeping a close eye on any developments that could impact the markets in the coming year.
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