Stock Index Futures Gain at the End of a Bumper Year

March S&P 500 E-Mini futures (ESH25) are up +0.26%, and March Nasdaq 100 E-Mini futures (NQH25) are up +0.30% this morning, pointing to a positive start on Wall Street in the final trading session of 2024.

In yesterday’s trading session, Wall Street’s main stock indexes ended lower, with the benchmark S&P 500, the blue-chip Dow, and the tech-heavy Nasdaq 100 falling to 1-week lows. Mega-cap technology stocks retreated, with Tesla (TSLA) dropping over -3% and Meta Platforms (META) sliding more than -1%. Also, chip stocks came under pressure, with Micron Technology (MU) and On Semiconductor (ON) slumping over -3%. In addition, MicroStrategy (MSTR) plunged more than -8% and was the top percentage loser on the Nasdaq 100 after the company disclosed that it had bought 2,138 bitcoins for $209 million in the past week. On the bullish side, American Airlines (AAL) rose over +1% after Raymond James upgraded the stock to Outperform from Market Perform with a $24 price target.

Economic data released on Monday showed that the U.S. Chicago PMI unexpectedly fell to a 7-month low of 36.9 in December, missing the 42.7 consensus. At the same time, U.S. November pending home sales climbed +2.2% m/m, stronger than expectations of +0.9% m/m.

Meanwhile, the U.S. stock and bond markets will be closed on Wednesday for the New Year’s Day holiday. Also, the U.S. bond market will close early at 2 p.m. Eastern Time today for New Year’s Eve.

Optimism about interest rate cuts, enhancements in corporate profitability due to artificial intelligence integration, and expectations that President-elect Donald Trump’s policies could stimulate economic growth have driven much of this year’s gains on Wall Street. The benchmark S&P 500 index has been in a bull market for over two years and is set to finish its second consecutive year with gains exceeding +20%. The blue-chip Dow and tech-heavy Nasdaq 100 indexes are poised to end 2024 higher by about +13% and +26%, respectively.

“Investors are looking forward to two big things [next year]: whether Trump’s policies are going to be pro-growth or not, and if the Fed is going to continue injecting easy money into the system,” said Adam Sarhan, chief executive at 50 Park Investments. 

U.S. rate futures have priced in an 88.8% chance of no rate change and an 11.2% chance of a 25 basis point rate cut at the conclusion of the Fed’s January meeting.

Today, investors will focus on the U.S. S&P/CS HPI Composite - 20 n.s.a., which is set to be released in a couple of hours. Economists forecast this figure to be +4.1% y/y in October, compared to +4.6% y/y in September.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.521%, down -0.53%.

The Euro Stoxx 50 index is up +0.19% this morning in thin trading ahead of the New Year holiday, with markets in Germany, Italy, and Switzerland among those closed on New Year’s Eve, while exchanges in London and Paris have shortened sessions. The index has gained just +7.9% in 2024, significantly underperforming its U.S. peers. Concerns over potential trade tariffs by U.S. President-elect Donald Trump have pressured European equities, particularly those with exposure to China. Political turmoil in France and Germany has also dampened sentiment this year. Meanwhile, Europe’s modest gains fall short of its historical average, with ongoing risks clouding prospects for a strong start in 2025. In corporate news, Wizz Air Holdings Plc (WIZZ.LN) gained over +1% after the airline operator announced that it anticipates a return to growth in the full year 2026. 

The European economic data slate is empty on Tuesday.

China’s Shanghai Composite Index (SHCOMP) closed down -1.63%, while Japanese financial markets were closed for a holiday.

China’s Shanghai Composite Index ended the final trading day of 2024 on a downbeat note as investors were unimpressed with the latest PMI data from the country. Semiconductor and brokerage stocks led the declines on Tuesday. At the same time, energy and telecom stocks outperformed. An official factory survey released on Tuesday showed that China’s manufacturing activity grew for the third consecutive month in December, albeit at a slower rate, indicating that a blitz of new stimulus is bolstering the world’s second-largest economy. Separately, a survey showed that China’s services activity expanded at the quickest pace in nine months in December. Meanwhile, the benchmark index posted an annual gain of +12.8%, snapping a two-year losing streak. Chinese authorities have introduced some of the most aggressive measures since September, including interest rate cuts, home buying incentives, and funding programs for stock purchases, to support the faltering economy and restore domestic confidence. In other news, the People’s Bank of China announced on Tuesday that it will conduct a second round of operations under a recently created funding scheme for financial institutions to support the country’s stock market. China’s securities regulator said in a separate statement that it is also broadening the range of institutions eligible to participate in the swap scheme, providing them with easier access to funding. Investors now look forward to China’s Caixin manufacturing PMI data for December, scheduled for release on Thursday. 

Chinese markets will be closed on Wednesday for New Year’s Day.

The Chinese December Manufacturing PMI came in at 50.1, weaker than expectations of 50.3. 

The Chinese December Non-Manufacturing PMI arrived at 52.2, stronger than expectations of 50.2.

Japan’s Nikkei 225 Stock Index was closed today for the New Year holidays. The markets will reopen on Monday, January 6th.

Pre-Market U.S. Stock Movers

ACADIA Pharmaceuticals (ACAD) climbed more than +8% in pre-market trading after S&P Dow Jones Indices announced that the stock would be added to the S&P SmallCap 600 index, effective before the opening of trading on Friday.

CompoSecure (CMPO) rose over +3% in pre-market trading after announcing plans to spin off a newly formed subsidiary, Resolute Holdings Management.

Ralph Lauren (RL) advanced more than +1% in pre-market trading after Argus upgraded the stock to Buy from Hold with a $250 price target.

Sangamo Therapeutics (SGMO) plummeted about -48% in pre-market trading after announcing its gene therapy agreement with Pfizer for hemophilia A will terminate on April 21st, 2025.

Dave (DAVE) slumped more than -8% in pre-market trading after the Federal Trade Commission referred its federal court case against the online cash advance firm to the U.S. Department of Justice.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Tuesday - December 31st

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