To The Moon

1 Market Recap

• S&P 500 Ends Slump with Strong Rally

The $.SPX(.SPX)$ snapped a five-session losing streak, rising 1.3% on Friday—its best single-day performance since Nov. 6, 2024. This rally, driven largely by dip-buying, came after a lackluster performance during the traditionally strong Santa Claus Rally period. Despite the gains, the S&P 500 ended the stretch with a 0.5% decline, missing its historical average of a 1.3% gain…

Ind perf

U.S. 10-Year Treasury: Yields are testing resistance at 4.55%, reflecting investor caution amid inflation and rate uncertainties.

• Historical Context: Bearish or Blip?

While some interpret the underperformance during this seasonal rally as a bearish signal for the year ahead, historical data offers a more nuanced view:

• In late 2023/early 2024, the S&P 500 also struggled during the same period, yet the index surged through the rest of 2024.

• Fundamentals, such as earnings growth and economic conditions, are likely to play a more significant role than seasonal trading patterns.

2 Upcoming Catalysts

• Earnings Season Begins

Investors are gearing up for the start of Q4 2024 earnings season, with initial reports from: Delta Airlines, Constellation Brands, Walgreens Boots Alliance.

These early results will be followed by major banks, including JPMorgan Chase and Bank of America, starting January 15.

Analyst Expectations

Earnings Growth: 9.6% for the S&P 500 in Q4. $NASDAQ 100(NDX)$ $NVIDIA(NVDA)$ $Tesla Motors(TSLA)$ $Apple(AAPL)$

• Federal Reserve and Trump’s Return

Federal Reserve Decision: The year’s first rate decision is set for January 29, with markets watching for guidance on inflation and economic growth.

Donald Trump’s Inauguration: Scheduled for January 20, investors remain cautious about potential policy shifts under the incoming administration.

Trump Jan 20

3 Sector Highlights

• Energy

Oil prices rose at the start of 2025 due to a confluence of supply and demand factors:

• Cold Snap: Arctic weather is expected to boost U.S. demand.

• Supply Risks: Possible disruptions in Texas could temporarily tighten supply.

• Prices: Brent Crude: Trading at $75.50. WTI Crude: At $72.50.

$XLE

Natural gas prices in Europe also surged as the expiration of a gas transit contract between Russia and Ukraine ended flows. The Rotterdam TTF benchmark climbed from €40 to €50/MWh in just 15 days.

• Metals

• Gold: Despite a strong dollar, gold began the year on an upward trend, trading at around $2,650/ounce.

4 Outlook

Key Questions for 2025

1. Can Earnings Support Market Gains? The robust 9.6% earnings growth expected for Q4 could provide a strong foundation for equities, but any disappointment may renew selling pressure.

2. How Will Trump’s Policies Affect Markets? With a history of market-moving trade and fiscal policies, the return of Donald Trump to the presidency introduces uncertainty that could shape 2025 sentiment.

3. Will Central Banks Maintain Support? With the Fed's first decision looming, investors will watch for signals of easing or tightening against a backdrop of mixed inflation and growth data.

While the underwhelming Santa Claus Rally dampened spirits, Friday's rebound offers a glimmer of hope. Investors will need to navigate near-term earnings results and macroeconomic signals carefully, but the year’s broader trends remain to be written.

Conclusion

As 2025 begins, markets are balancing optimism about corporate earnings with caution around policy shifts and economic uncertainties. A renewed focus on fundamentals and data in the coming weeks will determine whether.

While the underwhelming Santa Claus Rally dampened spirits, Friday's rebound offers a glimmer of hope. Investors will need to navigate near-term earnings results and macroeconomic signals carefully, but the year’s broader trends remain to be written…

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@TigerStars @CaptainTiger @Tiger_SG @TigerCommunity @Tiger_comments

This analysis is for informational purposes only and should not be considered investment advice. Financial markets are subject to unpredictable changes, and readers are encouraged to consult professional advisors before making investment decisions.