Ringing in the New Year: A Bullish Outlook for 2025
As we bid farewell to 2024, the stock market is wrapping up the year on a high note. Despite a sluggish final week of December, the major indices have posted impressive gains. The Dow Jones Industrial Average is up 14%, the S&P 500 has risen 25%, and the Nasdaq has surged 31%.
A Strong Finish to 2024
Last week’s market performance was a testament to the resilience of equity investors. The Dow Jones Industrial Average gained 0.4%, the S&P 500 rose 0.7%, and the Nasdaq climbed 0.8%. This holiday-shortened week will be a quiet one, with markets closed on Wednesday for New Year’s Day.
Earnings Season on the Horizon
As we look ahead to 2025, the new earnings season is set to kick off in mid-January with the big banks taking center stage. Argus forecasts a robust 12% EPS growth for S&P 500 companies, building on the higher-than-expected 9% growth seen in 2024.
Economic Calendar Highlights
This week’s economic calendar is light, with only a few key releases. On Tuesday, the Case-Shiller Home Price Index will be reported, followed by Construction Spending on Thursday, and ISM Manufacturing on Friday. Argus Chief Economist Chris Graja is keeping a close eye on the ISM Manufacturing report, which he believes will provide valuable insights into the state of the manufacturing sector.
Manufacturing: A Key Indicator
According to Graja, “Friday’s report on Manufacturing New Orders is expected to remain just above 50, signaling expansion. This is a crucial leading indicator, and even modestly good news would be a welcome sign for manufacturing, which hasn’t been pulling its weight in a strong consumer-driven economy.”
Mortgage Rates and Gas Prices
In other news, mortgage rates ticked up 13 basis points last week, with the average 30-year fixed-rate mortgage now standing at 6.85%, according to FreddieMac. Meanwhile, the average price for regular gas held steady at $3.02 per gallon.
A Positive Outlook for 2025
As we enter the new year, the outlook remains bullish. With a strong earnings season on the horizon and a resilient economy, investors can look forward to a promising 2025.
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