Markets finished the year higher, but growth faded for the month of December. Will the New Year continue to prosper markets or should we temper our expectations?
Monday
S&P 500-1.07% | NASDAQ -1.19%
Markets began the week lower with only 2 trading days left in 2024 which was more of the same from last week. Pending Home sales showed signs of life as the primary data release on the day.
Tuesday
S&P 500-0.43% | NASDAQ -0.90%
The slide continued on New Year’s Eve but was more pronounced in the tech-heavy NASDAQ. Although the year concluded in the red, the S&P500 and NASDAQ rose 23% and 29% on the year, respectively.
Wednesday
S&P 500 0.00% | NASDAQ 0.00%
Happy New Year! – Markets Closed to kick off 2025.
Thursday
S&P 500-0.22% | NASDAQ -0.16%
Markets hovered but fell slightly the day after the ball dropped. Mortgage rates have increased since the December announcement of a 25-basis point rate cut. The prevailing outlook is rates will be higher for longer and there will be less cuts over the course of the year.
Friday
S&P 500 1.26% | NASDAQ 1.77%
In a welcome sign of increased production, manufacturing increased into expansion territory which was last seen in April 2024. With increasing production, that bodes well for near-term growth and acts as a barometer of economic strength moving forward.
Conclusion
S&P 500-0.48% | NASDAQ -0.51%
The trading week straddled two calendar years and was shortened with markets being closed on New Year’s Day, but we made it. Now that the confetti have settled, what does 2025 have in store? We do know that markets completed a 2nd straight year of significant growth after the down year of 2022. The major items on the minds of policy makers and the investment community revolves around taxes, geopolitical tensions, and growth (no matter the size). With the last two years of strong growth, the answer to the question isn’t necessarily whether markets will definitively trend higher or trend lower. The answer lies more in the data and economic factors at hand which are currently showing signs of strength, albeit lower than 2023 and 2024. The current atmosphere lends itself to positive GDP and forward-looking growth. We wouldn’t be surprised that there are profits to be made and near-term selloffs to occur early in the year. However, the longer-term forecasts, which is key in all investment strategies, appears to be trending in a favorable direction.
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