It's been a blockbuster year for the stock market with plenty of plot twists along the way but the ending of 2024 is proving to be an anticlimax.
Investors won't be too fussed by that as they look at their gains for the year. But the disappointing final act ought to spark some concerns over how things may pan out early in 2025.
Expectations for fewer interest rate-cuts next year, and rising bond yields as a result, have been key to a dismal December. Traders now see just one quarter-point rate cut in 2025 -- a month ago they were more confident of two, according to CME's FedWatch tool.
The new year also brings a new Trump presidency, and with it fears that his policies could fuel inflation.
Treasury Secretary Janet Yellen's new year message certainly wasn't a happy one. She said the U.S. government could hit its debt ceiling as early as Jan. 14, at which point "extraordinary measures" will be needed to prevent it breaching the borrowing limit. A shutdown may have been averted ahead of the holidays, but political uncertainty will still be on the agenda into January.
The end of the year is often a time for reflection. The S&P 500 is on track for a 25% gain this year, the Dow Jones Industrial Average is up 14%, and the tech-heavy Nasdaq Composite has risen 31%. But the recent picture is less rosy -- just 64 of the S&P 500 stocks are up so far in December, while the index is down 1% this month. The Dow has had it much worse, down 4.3% this month.
A new year provides a chance to look forward. If 2024 was a thriller, investors will be hoping next year doesn't turn into a horror movie as they look ahead with caution and a sense of fear.
-- Callum Keown
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Former President Carter's Legacy: Inflation Battle, Middle East Peace
Former President Jimmy Carter, who died Sunday at age 100 at his home in Plains, Ga., as the longest-living American president, won the Nobel Peace Prize and spent his years after leaving office pursuing peace and charitable works. In office, he battled oil shocks and inflation and forged a Middle East peace agreement.
-- The 39th President came to office in 1977, when the U.S. was already
battling inflation fueled by an oil shock during the Nixon administration
and government spending on the Vietnam War and social programs. Carter, a
Democrat, called inflation the biggest domestic issue facing the country.
-- Inflation in 1977 was 6.5%, and by the end of 1980, a month before
Carter's time in the Oval Office ended, inflation had climbed to an
annual rate of 13.5%. It was a period of stagflation, defined as sluggish
economic growth, high unemployment, and high inflation. But the S&P 500
returned 30.5% during his four-year term.
-- Carter nominated Paul Volcker as chair of the Federal Reserve in a
reshuffling of his administration's top economic aides. Volcker,
renominated under President Ronald Reagan, ultimately tamed inflation by
raising interest rates to a nosebleed high of over 22% by mid-1981.
-- Among other accomplishments in office, Carter forged a peace agreement
between Egypt and Israel in 1978. Months later, the treaty was signed on
the White House North Lawn. That same year, he signed a bill deregulating
the airline industry, ushering in a period of competition, upstart
airlines, and lower fares.
What's Next: The Carter Center said there will be public observances in Atlanta and Washington, D.C., followed by a private interment in Plains, Ga. The final arrangements for President Carter's state funeral, including all public events and motorcade routes, are pending, the Center said.
-- Liz Moyer
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What Boeing Investors Should Know About Jeju Flight 2216
A South Korean Jeju Air flight carrying 181 people from Thailand to South Korea crashed on landing Sunday, tragically killing most on board. The plane was a Boeing 737-800 jet, which puts the plane manufacturer's safety record back into focus.
-- The airline said the regular inspections of the 737-800 jet, manufactured
in 2009, had been completed before takeoff. The carrier said the plane
deviated from the end of the runway, crashed into the outer wall of the
airport, and caught fire.
-- Boeing's 737-800 plane is different from its 737 MAX plane, which is the
model closely monitored by investors since two tragic MAX crashes
grounded that jet worldwide between March 2019 and November 2020. Those
two MAX jets were relatively new and the problem was traced back to
faulty flight-control software.
-- The 737-800 model was introduced in the late 1990s, and Boeing has
delivered more than 5,000 of the planes. Its safety record compares
favorably with older jet models and is similar to products from rival
plane-maker Airbus.
-- Since Boeing's MAX problems, investors have paid close attention to
catastrophic accidents involving Boeing jets. In March 2022, a China
Eastern Airlines 737-800 crashed, killing all on board. While equipment
failure wasn't cited as a root cause, Boeing shares fell about 8% in the
month after the incident.
What's Next: Coming into Monday trading, Boeing stock was off about 27% since an emergency door plug blew out of a 737 MAX 9 jet on Jan. 5. Sunday's crash could weigh even further on Boeing's already beaten-down stock.
-- Al Root and Elsa Ohlen
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Delivery Drones Are Coming. Amazon Isn't the Only Game in Town.
Drone delivery platforms run by Amazon and others have been 11 years in the making and still haven't advanced much further than the testing phase, but it's too early to give up. Billions of investment dollars are at work and the business is just now taking shape -- coinciding with drone-sighting mania.
-- Today drones are delivering medicine, sundries, snacks, and takeout food
in dozens of countries. PwC said drones completed more than five million
deliveries in 2024, moving $250 million of goods. In 10 years, they will
soar to 800 million deliveries a year, with a value of $65 billion, PwC
said.
-- In America, commercial drones are now touching down in parts of Texas,
including the Dallas area, in Arkansas, Virginia, and North Carolina, not
to mention Silicon Valley, Salt Lake City, and Phoenix. Service is coming
to Ohio, Florida, Michigan, and Washington state.
-- Amazon isn't alone. Drone delivery is evolving into a multibillion-dollar
game of 3-D chess with players that also include Alphabet's Google and
Walmart plus start-ups like Zipline, DroneUp, and Matternet. Delivery
services like DHL and DoorDash and restaurant chains such as Wendy's and
Panera Bread are also players.
-- Drone delivery is another front in the battle between the nation's
biggest retailers, Amazon and Walmart, both of which are stepping up
drone operations. Amazon told Barron's it wants to deliver 500 million
packages annually across the globe by drone by the end of this decade.
What's Next: As for the mystery drones said to be flying over New Jersey and other states, the drone companies mentioned here say that if these are rogue drones, they don't belong to them. Ultimately, anti-drone sentiment could impinge drone delivery through tighter federal regulation or municipal bans.
-- Andy Serwer
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Hollywood's Newest Flicks Spark Late Box Office Surge
A late surge in moviegoing is pushing Hollywood's box office sales closer to 2023 totals as the movie industry works to overcome the disruptive effects of last year's strikes on production and movie release dates. Comscore projects full-year sales of $8.75 billion, just 3.3% shy of last year.
-- This weekend was led by family films Paramount Pictures' Sonic The
Hedgehog 3 and Walt Disney's Mufasa: The Lion King. But there was also a
strong showing from Focus Features' gothic horror flick Nosferatu. Total
domestic ticket sales are still far below the record $11.9 billion in
2018, according to Comscore.
-- Comscore senior media analyst Paul Dergarabedian said sales have
accelerated from where they were at midyear, when box office receipts
were tracking 27.5% below 2023. June's $154.2 million domestic debut of
Disney's Inside Out 2 started the ball rolling on sales for the second
half of 2024.
-- The R-rated Nosferatu has raked in $40.3 million since its Christmas Day
opening, including $21.2 million over the three-day weekend. It came in
third at the North American box office, behind Sonic The Hedgehog 3,
which grossed $38 million for the weekend, and Mufasa, which grossed
$37.1 million.
-- Searchlight's A Complete Unknown, a biopic of Bob Dylan starring
Timothée Chalamet, also opened on Christmas and has grossed $23.3
million from Wednesday through the weekend. Dergarabedian said the
eclectic slate of films provided a strong homestretch for the theater
business.
What's Next: Major studios, sequels, and PG-rated films dominated moviegoing this year, but the 680 million movie tickets sold through Dec. 15 lags behind the more than one billion annual average from 2005 to 2019, EntTelligence said. Hollywood often saves its biggest movie releases for year-end, to be fresh for awards season.
-- Janet H. Cho
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MarketWatch Wants to Hear From You
For student loan borrowers, 2024 was a roller coaster year. And it looks like managing student loans will continue to be complicated in 2025. What are some of the biggest shifts experts are watching for in the coming year?
A MarketWatch correspondent will answer this question soon. Meanwhile, send any questions you would like answered to thebarronsdaily@barrons.com.
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-- Newsletter edited by Liz Moyer, Patrick O'Donnell, Callum Keown
(MORE TO FOLLOW) Dow Jones Newswires
December 30, 2024 06:49 ET (11:49 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.
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