Stock Region Market Briefing
Stock Region Market Briefing Newsletter - Thursday, January 2, 2025.
Stock Region Market Briefing Newsletter - Thursday, January 2, 2025
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Disclaimer: The information provided herein is for educational and informational purposes only and should not be construed as individual or specific investment advice. Stock market investments carry risks, including loss of principal. Always conduct your research or consult with a financial advisor before making investment decisions.
🚗 Tesla Takes a Hit as Deliveries Decline (Ticker: TSLA)
Tesla's (TSLA) vehicle deliveries fell for the first time year-over-year, with 1.77 million units delivered in 2024 compared to 1.81 million in 2023—a dip of 2.2%. The much-anticipated Cybertruck, Tesla's first new model since 2020, saw disappointing numbers, with only 85,133 trucks hitting the market in its launch year. Other "aging" models like the Model S and Model X failed to offset the decline in growth.
Tesla's stock, which has been volatile due to CEO Elon Musk's political affiliations, slipped 4.3% following the news, closing at $354.32. With growing pressure to maintain its dominance amidst a fiercely competitive EV landscape, Tesla investors will be watching developments in key markets like China to shape their expectations in 2025.
Growth Stocks to Watch in EV Sector: Keep an eye on Rivian (RIVN) and Lucid Group (LCID), which continue to ramp up production and maintain strong institutional backing.
💰 Gold Remains a Safe Haven
Gold continues to shine, with prices seeing a moderate uptick in early Asian trading as many investors hedge against ongoing macroeconomic headwinds. Analysts expect gold to remain a key asset for portfolio stability in 2025, especially as global inflation trends persist.
Top players in the gold mining industry, such as Barrick Gold (GOLD) and Newmont Corporation (NEM), are well-positioned to benefit from continued resilience in the commodity's appeal.
💴 Yen Weakens on Dovish Bank of Japan
The Japanese yen continued its weakening trajectory against major currencies as the Bank of Japan (BOJ) signaled slower-than-expected rate hikes for 2025. A sluggish economic recovery coupled with global monetary policy divergence places the yen under additional pressure.
For U.S.-based investors, this trend could present opportunities to reinvest into Japanese equities as a weaker yen benefits exporters, such as Toyota (TM) and Sony (SONY).
🏮 Hong Kong Struggles as Auto Stocks Slide
Hong Kong's Hang Seng index opened lower, driven by sharp declines in Chinese auto stocks. This comes despite reports of strong December deliveries within the sector. The underperformance highlights waning investor confidence in the stability of Chinese industrial growth.
Automotive suppliers like BYD Company Ltd (BYDDY) face tightened margins amidst rising competition and economic hurdles, putting downward pressure on regional shares.
🛢️ Oil Prices Climb on Recovery Hopes
Oil prices ticked upward in early trading, reflecting growing optimism for a demand recovery in 2025. U.S. crude inventories dropped by 1.2 million barrels, though fuel stocks saw substantial increases. This divergence underscores the shifting consumption trends as travel and industrial activity vary seasonally.
For long-term investors, Chevron (CVX) and Exxon Mobil (XOM) present attractive plays as they capitalize on improved energy demand and robust balance sheets.
📉 U.S. Treasury Yields Set Records
The U.S. 10-year Treasury yield ended 2024 on a historic high, extending its climb for the fourth year in a row. Rising yields signal concerns about higher borrowing costs, creating headwinds for growth-oriented sectors like tech.
Companies like Apple (AAPL) and NVIDIA (NVDA), though resilient, may face valuation pressures as rate-tightening measures persist.
🛢️ European Gas Prices Surge Amid Supply Risks
European natural gas prices spiked following the expiration of the Russia-Ukraine transit agreement and an expected winter cold snap. These dynamics continue to exacerbate the continent’s energy crisis, pushing energy companies like Shell (SHEL) and TotalEnergies (TTE) into the spotlight as they rush to stabilize supply chains.
🏛️ Security Risks Highlight U.S. Events
Security measures remain top of mind in Washington, D.C., following a reckless driving incident near Capitol Hill amid growing national tensions. Heightened precautions are in place ahead of pivotal events, including the Congressional certification of President-Elect Donald Trump.
🍎 Apple Faces Legal and Consumer Challenges (Ticker: AAPL)
Apple (AAPL) made headlines after agreeing to a $95 million settlement related to a class-action lawsuit over Siri's accidental recordings of private conversations. Eligible U.S. users can claim up to $20 per device (up to five devices) under this settlement. Additionally, Apple has enhanced battery safety measures for its AirTags following new regulations under "Reese’s Law."
Despite these hurdles, Apple’s strong global demand for its products keeps its fundamentals solid. AAPL closed at $188.54, with analysts predicting a strong rebound into the second quarter of 2025, thanks to its diversified ecosystem.
Growth Stocks to Watch in Tech: Look out for Advanced Micro Devices (AMD) and Alphabet (GOOGL), which continue to innovate in high-growth segments like AI and cloud computing.
🔌 Nuclear Energy Deal Spotlights Constellation (Ticker: CEG)
The U.S. government’s historic $840 million nuclear energy contract with Constellation Energy (CEG) underscores the growing momentum behind clean energy initiatives. The deal supports a shift away from fossil fuels while addressing surging energy demands, particularly from AI-driven data centers.
Constellation (CEG), trading at $77.89, is quickly becoming a favorite among investors focused on renewable energy. With plans surrounding nuclear plant extensions and advanced reactor technologies, Constellation is a must-watch stock for 2025 and beyond.
Growth Stocks to Watch in Energy: Consider stocks like NextEra Energy (NEE) for alternative energy exposure and Plug Power (PLUG) in hydrogen solutions.
🔮 Overall Stock Market Forecast
Looking ahead, 2025 offers a mixed picture for global markets. Here's what to expect:
Positive Drivers: Stable commodity prices, resilient tech innovation, and continued clean energy adoption.
Possible Risks: Higher interest rates, geopolitical tensions, and fluctuating global growth rates.
Investors are encouraged to build a diversified portfolio, balancing growth stocks, defensive sectors, and commodities to weather volatility. Sectors like energy, EVs, and clean tech are poised for long-term growth, even as rate-sensitive areas face pressure.
Market Recap and Highlights
The stock market kicked off 2025 with noticeable volatility as investors balanced optimism from recent buying opportunities with growing concerns over rising interest rates and sluggish mega-cap performance. While the broader market ended the day with marginal losses, segments like small-cap and semiconductor stocks showed resilience.
S&P 500: -0.2%
Nasdaq Composite: -0.2%
Dow Jones Industrial Average: -0.4%
Russell 2000: +0.1%
The energy sector stood out, gaining +1.0%, fueled by a surge in crude oil (+1.9%, $73.11/bbl) and natural gas prices (+1.6%). Technology lagged due to Apple's (AAPL) sluggish iPhone demand outlook and Tesla's (TSLA) weaker-than-expected Q4 deliveries, both impacting investor confidence.
Key Corporate and Market Developments
1. Acquisitions and Expansions
Pursuit Attractions and Hospitality (PRSU) completed its acquisition of Jasper SkyTram for ~$17 million. The move bolsters PRSU’s market position in the hospitality sector. Shares closed at $41.63 (-0.88%). Expect continued focus on experiential assets to drive long-term revenue growth.
Crane (CR) closed its divestiture of the Engineered Materials business to KPS Capital Partners. This divestiture sharpens CR’s strategy to focus on its core industrial goods operations, with shares closing at $150.98 (-0.77%).
Cencora (COR) wrapped up the acquisition of Retina Consultants of America at a $4.4 billion outlay before adjustments. The acquisition is projected to boost 2025 earnings per share (EPS) guidance to $15.15-$15.45, above earlier estimates. COR stock closed at $224.74 (+0.06%).
2. Growth Financing and Strategic Moves
Grupo Financiero Galicia (GGAL) announced an offering of 11,382,161 American Depositary Shares. This move, coupled with a share price jump of +6.48%, points to GGAL’s push for stronger financial footing. Shares closed at $68.80.
Apollo Global Management (APO) delivered strong Q4 net investment income estimates of $265 million. This led to a small gain in shares (+0.42%), ending at $165.86. APO’s alternative investment returns continue to demonstrate income-generating potential tied to diversified strategies in retirement services and private equity.
3. Operational Adjustments
Docebo (DCBO) announced that CFO Sukaran Mehta will step down by February 28, 2025. Interim leadership will be provided by Brandon Farber. Meanwhile, shares grew slightly (+0.52%) to $45.29. Investors should monitor for transition-related impacts on DCBO’s performance.
BJ Restaurants (BJRI) entered a cooperation agreement with Act III Holdings, signaling enhanced strategic vision under industry-leading Ron Shaich. BJRI stock gained 2.19%, closing at $35.90.
4. Utilities and Resources
Avista (AVA) filed its 2025 Electric Integrated Resource Plan, charting strategies to meet future energy demands. AVA stock experienced a modest decline yesterday, closing at $36.35 (-0.28%). Long-term investors can watch AVA’s approach to renewable energy adoption and grid modernization over the next 20 years.
5. Defense Contracts
Northrop Grumman (NOC) secured a significant $481 million U.S. Army contract, affirming the company's role as a key national defense supplier. Shares slipped slightly, down 0.27% to $468.01, but its robust pipeline of defense projects points to long-term stability.
Economic Data Review
Jobless Claims: Initial unemployment claims fell to 211,000, reflecting ongoing labor market strength.
Construction Spending: Flat for November but remains up 3% year-over-year.
Manufacturing PMI: December’s reading of 49.4 signifies mild contraction but suggests stabilization in industrial activity.
Growth Stocks to Watch
1. Apple (AAPL)
Closed at $243.85 (-2.6%) in reaction to cautious iPhone demand forecasts for 2025. Long-term investors should focus on the company’s expansion into services and AI-driven technologies.
2. Tesla (TSLA)
Closed at $379.28 (-6.1%) after a report confirmed the first annual decline in deliveries. Despite the setback, Tesla's ambitious diversification into energy storage and global manufacturing remains critical for future growth.
3. Microsoft (MSFT)
Settled at $418.58 (-0.7%) after a strong start to the session. MSFT’s continued cloud computing dominance makes it a consistent pick for growth portfolios.
Notable Sector Highlight
The semiconductor sector outperformed with a 0.8% gain in the PHLX Semiconductor Index (SOX). Companies like NVIDIA (NVDA), Advanced Micro Devices (AMD), and Taiwan Semiconductor Manufacturing Company (TSM) continue to benefit from strong demand for AI and computing chips.
Stock Market Forecast
With the Federal Reserve likely maintaining its higher-for-longer interest rate stance, the market is expected to remain range-bound in Q1 2025. Rising energy prices and a strong labor market offer tailwinds, while potential earnings downgrades for technology and consumer discretionary could keep indices in check. Long-term investors may consider dollar-cost averaging into quality growth stocks as these sectors stabilize.
Key themes to watch include global supply chain rebalancing, evolving central bank policies, and corporate earnings guidance entering reporting season.
Disclaimer: Past performance is not indicative of future results. Investment decisions carry inherent risks and involve factors that are not guaranteed. Consult with a licensed financial professional before making any investment choices.
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