Stock Region Market Briefing
Stock Region Market Briefing Newsletter - Sunday, December 29, 2024.
Stock Region Market Briefing Newsletter - Sunday, December 29, 2024
The stocks featured in this report were previously delivered in our trading room in real-time. To access Stock Region’s real-time trade ideas, then be sure to purchase a membership now.
Disclaimer: This newsletter is for informational purposes only and should not be considered financial advice. Always conduct your own research or consult a professional before making investment decisions.
Market Overview & Key Updates
Natural Gas Retreats After Hitting $4 Milestone
After briefly reaching the $4 mark, U.S. natural gas prices retreated, marking a sharp reversal from a near two-year high. The initial rise can be attributed to colder weather forecasts and supply concerns, but the price eased as traders took profits. Interestingly, natural gas futures (ticker symbol: NG=F) remain positioned for potential volatility in the coming weeks as attention shifts to the upcoming EIA storage report.
Growth Stock to Watch:
Cheniere Energy, Inc. (LNG) – Cheniere, a leader in natural gas liquefaction and storage, stands to benefit from heightened demand and price fluctuations.
Australian Shares Set for Pre-Christmas Lift
Australia's S&P/ASX 200 index (ticker symbol: ^AXJO) maintained its upward trend, gaining for the third day in a row. This pre-Christmas rally highlights overall market optimism, bolstered by the materials and financial sectors. Investors in the region remain focused on global trends and local policy cues for 2024.
Growth Stock to Watch:
BHP Group Limited (BHP.AX) – A key player in materials, BHP offers exposure to Australia’s resource-driven economy.
Commonwealth Bank of Australia (CBA.AX) – One of Australia’s top financial institutions, well-positioned for stronger lending growth.
Gold Steady Amid Holiday Lull
Gold prices (ticker symbol: GC=F) hovered within a narrow range amid lighter trading during the holiday season. With central banks globally maintaining cautious stances, many investors continue to treat gold as a safe-haven asset. Current price stability reflects limited short-term catalysts until early 2024 data on inflation and rate policies arrive.
Notable Gold Stock:
Barrick Gold Corporation (GOLD) – A go-to mining company for those looking to hedge with precious metals exposure.
Oil Slips Amid Market Uncertainty
Crude oil prices dipped slightly as traders held back in anticipation of fresh data to guide market movements. The recent EIA report highlighted declining U.S. crude inventories due to increased refinery activity. Brent crude (ticker symbol: BZ=F) and WTI crude (ticker symbol: CL=F) remain pivotal markers for the energy sector into early 2024.
Growth Stock to Watch:
Exxon Mobil Corporation (XOM) – Diversified operations in oil, gas, and renewables help position Exxon for market shifts.
Ringgit Faces Continued Pressure in Early 2024
The Malaysian ringgit weakened as U.S. inflation concerns and monetary policy uncertainty pushed the dollar higher. Currency markets point toward continued volatility in the first quarter of 2024, as the Federal Reserve's decisions on interest rates loom. This dynamic could weigh on Malaysian equities, particularly export-reliant industries.
European Bond Yields Climb in Quiet Holiday Market
Bond yields across Europe edged higher during the Christmas trading lull. Despite lower market activity, traders positioned themselves based on expectations that central banks might maintain tighter monetary policies into 2024, aiming to control inflation.
Europe-Based Stock to Monitor:
Deutsche Bank AG (DB) – This financial institution could gain from higher rates benefiting its lending business.
U.S. Futures Dip; South Korean Markets Impacted by Political Unrest
U.S. stock futures (ticker symbols such as ES=F, NQ=F) pointed to a subdued outlook for the week, while South Korean markets took a hit amid political instability suppressing its currency. The KOSPI (^KS11) dropped as investor sentiment turned bearish. Continued global macro risks could weigh on Asian markets heading into January.
Natural Gas Futures Climb on Cold Weather and Supply Concerns
U.S. natural gas futures resumed their climb as colder weather forecasts for January boosted demand expectations. With supply metrics under review via the EIA’s upcoming report, this commodity remains a key energy-market driver looking forward.
Growth Stock to Watch:
EQT Corporation (EQT) – An Appalachian natural gas producer poised to leverage rising winter demand.
OpenAI Faces Challenges in Transition to a For-Profit Model
OpenAI's ongoing move into a Delaware Public Benefit Corporation has sparked debate, with criticism from figures like Elon Musk and other tech leaders. OpenAI's aim is to balance attracting private capital while fulfilling its mission to ensure AGI benefits humanity. This structural change could pave the way for growth in AI-aligned investments.
AI Stock to Watch:
NVIDIA Corporation (NVDA) – A leader in AI hardware and software innovation, NVIDIA remains integral to advancements in technology use cases.
U.S. Crude Oil Inventories Drop Amid Increased Refinery Activity
Recent Energy Information Administration (EIA) data revealed a sharper-than-expected decline in U.S. crude oil stockpiles. Refineries ramped up their utilization rates, signaling stronger processing demand. Despite mixed performance in the product stockpile segment, reduced inventory levels could support oil prices in early 2024.
Growth Stock to Watch:
Chevron Corporation (CVX) – With a solid footprint in both upstream and downstream operations, Chevron stands to benefit from tighter supply conditions.
Air Canada Flight Makes Fiery Emergency Landing
On a somber note, Air Canada’s Flight AC2259 experienced a fiery emergency landing at Halifax Airport, albeit with no serious injuries. This incident briefly impacted airline operations but underscores the necessity of continued investments in safety technologies and protocols.
Airline Stock Spotlight:
Air Canada (AC.TO) – While operational disruptions impact short-term analyses, its long-term recovery post-pandemic presents ongoing opportunities for investors.
Overall Stock Market Forecast
Heading into 2024, markets face a mixed backdrop of macroeconomic challenges and sector-specific opportunities. Energy and materials are witnessing notable movement, driven by weather conditions and geopolitical trends. Technology and AI remain long-term exciting sectors, while safe-haven assets like gold may continue to see inflows amid central bank caution.
Investors should expect volatility as markets digest early-year economic reports and central bank policy measures. Robust portfolios balancing risk and growth could fare well in navigating this uncertain landscape.
Weekly Market Recap
This week, the stock market experienced a mix of gains and losses, wrapped with a downside close on Friday driven by profit-taking as investors prepared for 2025. Despite this, both the S&P 500 and Nasdaq Composite logged modest weekly gains.
Key Index Performance (Year-to-Date):
Nasdaq Composite: +31.4%
S&P 500: +22.7%
Dow Jones Industrial Average: +14.1%
S&P MidCap 400: +12.8%
Russell 2000: +10.7%
On Friday, all major indices closed lower:
S&P 500: -1.1%
Nasdaq Composite: -1.5%
Dow Jones: -0.9%
All 11 sectors within the S&P 500 fell, with consumer discretionary (-1.9%), information technology (-1.5%), and communication services (-1.1%) leading the declines. Rising Treasury yields and outsized losses in mega-cap stocks such as NVIDIA (NVDA), Apple (AAPL), Amazon (AMZN), and Alphabet (GOOG) weighed heavily on the market.
Treasury yields were mixed, with the 10-year settling at 4.62% (+4 bps) and the 2-year stable at 4.33%. The CBOE Volatility Index (VIX) surged by 9.3% to 16.10, highlighting increased hedging activity ahead of potential year-end volatility.
Economic Data This Week
November Advanced International Trade in Goods: -$102.9 billion (widening from -$98.3 billion)
November Advanced Retail Inventories: +0.3% (indicating modest inventory growth)
November Advanced Wholesale Inventories: -0.2% (first decline in months)
Looking forward, the December Chicago PMI and November Pending Home Sales reports are due Monday.
Top Percentage Gainers and Losers
To provide a sector-wide view of this week’s movements:
Top Gainers
Healthcare
MESO (Mesoblast): +19.96% at $17.55
ALLO (Allogene Therapeutics): +17.91% at $2.21
TLRY (Tilray Brands): +13.1% at $1.43
Consumer Discretionary
DESP (Despegar.com): +32.05% at $19.35
PLYA (Playa Hotels & Resorts): +27.89% at $12.29
HMC (Honda Motor Co.): +20.26% at $28.73
Information Technology
CMTL (Comtech Telecommunications): +12.47% at $4.15
GDS (GDS Holdings): +12.45% at $22.27
Top Losers
Healthcare
ANAB (AnaptysBio): -9.55% at $13.16
BEAT (Biotelemetry): -8.23% at $2.23
Industrials
TPIC (TPI Composites): -17.29% at $1.99
AZUL (Azul Airlines): -10.06% at $1.61
Energy
DM (Dominion Energy Midstream): -16.14% at $2.39
These movements reflect sectoral trends as investors reallocate funds to hedge against macro uncertainties.
Growth Stocks to Watch
Investors seeking growth opportunities may want to pay attention to these movers and the potential catalysts driving their recent gains:
DESP (Despegar.com)
The stock surged 32.05% this week, supported by strength in Latin America’s e-commerce and travel markets. As consumer demand continues to rebound in these regions, DESP's digital travel solutions position it well for future growth.PLYA (Playa Hotels & Resorts)
A 27.89% gain signals optimism around travel recovery and rising demand for luxury destinations. PLYA’s all-inclusive Caribbean and Mexico resorts could drive follow-through momentum.MESO (Mesoblast)
After climbing nearly 20%, MESO gained attention with advancements in its stem-cell therapies. Positive clinical data and potential regulatory approvals could be key drivers in coming weeks.NVDA (NVIDIA)
While slipping 2% on the week, NVIDIA remains a long-term growth candidate due to its dominance in artificial intelligence-related chip manufacturing. Any dip could offer a buying opportunity for patient investors.
These stocks have shown strong potential; however, heightened market volatility calls for cautious positioning.
Stock Market Forecast
The broader market is entering 2025 with lingering uncertainty, as profit-taking activity and rising rates place pressure on equities. Analysts believe that the Federal Reserve’s monetary policy will remain a significant focus, alongside inflation trends and corporate earnings growth.
What to Expect in the Near Term:
Continued volatility: The rise in the VIX indicates that investors are hedging for swings, especially as the year-end approaches.
Sectoral rotation: With technology and consumer discretionary sectors leading this year's rally, value-oriented and defensive sectors may see increased investor interest in early 2025.
Key Levels to Watch:
The S&P 500 has a critical support level at 4,400. A breach could prompt further downside.
The Nasdaq Composite’s leadership will hinge on renewed strength in mega-cap tech.
While the long-term outlook for U.S. equities remains cautiously optimistic, driven by innovation and economic resilience, near-term challenges such as tighter financial conditions and profit-taking may temper gains.
Growth Catalysts for 2025:
Economists point to potential rebounds in manufacturing activity, stabilization of the housing market, and GDP growth upticks as positive macro drivers. At the company level, advancements in artificial intelligence, renewables, and biotech innovation could dominate the landscape.
Investors should expect a more selective market environment as valuations adjust to macroeconomic realities.
Thank you for reading! We look forward to keeping you updated in the coming year.
Stock Region Team
Disclaimer: All information presented is based on available data and analysis as of December 29, 2024. This is not investment advice. Please consult a qualified financial advisor for guidance tailored to your financial position.
We are working endlessly to provide free insights on the stock market every day, and greatly appreciate those who are paid members supporting the development of the Stock Region mobile application. Stock Region offers daily stock and option signals, watchlists, earnings reports, technical and fundamental analysis reports, virtual meetings, learning opportunities, analyst upgrades and downgrades, catalyst reports, in-person events, and access to our private network of investors for paid members as an addition to being an early investor in Stock Region. We recommend all readers to urgently activate their membership before reaching full member capacity (500) to be eligible for the upcoming revenue distribution program. Memberships now available at https://stockregion.net