1/13-17/25 Weekly Market Recap - Movers, Macro, Monetary, and Fiscal

Week 12/16-12/20/24

Weekly Market Summary by Aremorph


Summary - Movers, Macro, Monetary, and Fiscal


Check out how earnings reports, the ban of TikTok, and geopolitical events impacted the markets! Inflation data gives more speculation regarding the future interest rate environment and overall inflationary sentiment for the incoming presidency.


Global Weekly Movements

U.S. Equities

  • S&P 500 Index: 5,996.66 (3.71%)

    • All sectors of the SPX were up on the week, showing resounding strength and confidence in the markets. Energy, financials, and materials soared the most with (6.30%), (6.15%), and (6.04%) respectively. SLB announced an upside surprise on quarterly earnings coupled with the announcement of increasing dividends and repurchasing $2.3B of company stock. 

  • Dow Jones Industrial Average: 43,487.84 (3.73%)

  • Russell 3000 Index: 3,432.27 (3.59%)

  • NASDAQ Composite: 19,630.2 (3.84%)

  • Big Movers of the Week

    • Intel (INTC): 21.49 (13.58%)

      • Speculation regarding a potential acquisition by an undisclosed company was revealed, driving investors to Intel. Despite recent struggles with leadership and performance, Intel remains a central player in semiconductor efforts which reflects optimism in the stock. 

    • Morgan Stanley (MS): 137.87 (12.54%)

      • Morgan Stanley rallied alongside the XLF with a strong quarterly earning report, surprising the markets with an upside of 25% on revenue.

    • Citigroup (C): 79.99 (12.63%)

      • Citigroup led the charge in the financial sector with an increase in net income Y-o-Y by over 250%. Jane Frasers restructuring and optimization of the firm is beginning to take shape as she works to increase efficiency of the firm. The firm generated more fee-based revenue in fields like wealth management and invested more into risk and compliance.

    • Moderna (MRNA): 34.06 (-20.31%)

      • Over the past 2 weeks, Moderna has seen a large cut in stock price given cutting down revenue forecasts for 2025. Despite having 10 promising drugs in the pipeline, market sentiment remains uncertain in pricing in the risk and reward. 

Chinese Equities - Shanghai Composite (SHCOMP): 3,241.82 (2.95%)

Hong Kong Equities - Hang Seng Index (HSI): 19,584.06 (3.52%)

Japanese Equities- Nikkei 2225 (NI225): 38,451.46 (-2.78%)

European Equities

  • UK Index (UKX): 8,505.22 (3.11%)

  • German Index (DAX): 20,903.39 (3.70%)

Commodities

  • Gold Futures: 2,740.40 (0.97%)

  • Crude Oil Futures: 77.38 (0.42%)

U.S. Monetary & Fiscal Policy:

Inflationary Expectations & Impact of Interest Rates: Interest rates and inflation generally move in the same direction, with the Federal Reserve using interest rate adjustments as a primary tool to manage inflation. Higher rates aim to control rising inflation by reducing borrowing and spending, while lower rates stimulate the economy during periods of low inflation or economic slowdown. The Fed targets a 2% average inflation rate using tools like the federal funds rate and the PCE Index. However, the effects of rate changes lag, requiring policymakers to anticipate future inflation trends, which can lead to challenges in achieving stable economic growth.


Tariff Impact on Dollar Strength: Tariffs typically strengthen the dollar as they raise the price of foreign goods domestically, making the dollar appreciate against currencies like the Chinese RMB. While a stronger dollar benefits U.S. consumers and travelers by lowering import prices, it harms export sectors as U.S. goods become more expensive for foreign buyers, potentially worsening the trade deficit. Thus, using tariffs to reduce the deficit may have limited effectiveness at the macroeconomic level.


Global Macroeconomic News:

Inflation Data: Core PPI YoY was at 3.5% which matched the upwardly revised value from the previous month. Overall, the US economy is displaying strength ahead of the new presidential term. PPI was at 3.3%. The US core inflation rate came in at 3.2%, 0.1% under consensus and showing a slight slowing in core inflation. This hovering in inflation comes before the market expects to see inflationary reactions to Trump policies. Both inflationary data allows markets to speculate potential interest rate environments. There is a contrarian bet emerging in options trades, suggesting belief in a Fed hike instead of a cut.


Initial Jobless Claims: The initial jobless claims in the US rose by 14,000 to 217,000 which still remains low compared to the second half of 2024. This strength in the labor market has allowed the FOMC to increase its hawkish rhetoric regarding interest rates. 


TikTok Ban + Return: TikTok announced it is working to restore service after President-elect Donald Trump extended the deadline for selling the company. Trump plans to issue an executive order allowing more time for a deal that would create a U.S.-based joint venture, with new owners purchasing 50% of TikTok to address national security concerns. Trump’s vocal actions can serve as a canary as to what we expect in his policy emphasis. 

Potentially Impacted Securities: META

Ceasefire in Gaza: The ceasefire between Israel and Hamas marks a tentative pause to a devastating 15-month conflict that has left tens of thousands dead and displaced millions in Gaza. The agreement, influenced by U.S. diplomatic pressure, secures the release of vulnerable hostages in exchange for Palestinian prisoners and aid access but lacks guarantees for lasting peace. Israel's military actions weakened Hamas's regional allies, yet the group's governance remains unchallenged in Gaza. With fragile terms, unresolved political disputes, and immense humanitarian needs, the deal faces significant challenges in both implementation and broader negotiations.

Potentially Impacted Securities: BA, RTX, Gold, Crude


Sources: Google Finance, Market Watch, CME Fedwatch, Yahoo Finance, Reuters, New York Times, Bloomberg, Wall St Journal

Have a great week investing!

Sincerely,
Aremorph

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