To The Moon

Last Week's Recap

The US Market - A big Sell-off week

• The major indexes bounced on Friday to close out a tough week that saw a sell-off on Fed day with a hawkish outlook. The Fed’s indication of just two cuts next year, instead of the four it originally forecast, was the catalyst for the decline.

• The 30-stock Dow ended a 10-day losing streak, snapping its longest decline in 50 years. The S&P 500 fell almost 2% for the week, while the Nasdaq was off by about 1.8%. The S&P 500, Dow Jones and Russell 2000 fell through their 50-day lines and the Nasdaq fell below the 20-day line. Treasury yields hit five-month highs.

• November’s PCE — the Federal Reserve’s preferred inflation metric — increased 2.4% year over year. That was a tad less than economists expected and helped defuse some of the bearishness that arose earlier the week when the Fed said it would dial back future rate cuts in part because of stubborn inflation.

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The US Sectors & Stocks - All 11 sectors declined

• All 11 sectors that comprise the broad index declined for the week, underscoring the strength of the turmoil seen in prior trading days. Basic Materials, energy and real estate sectors notched the largest drops last week, registering declines of around 5%.

• Micron Technology (MU) reported slightly better-than-expected earnings on in-line sales for its fiscal first quarter. But its outlook for the current quarter badly missed expectations, sending shares plunging 16% that day.

• Tesla (TSLA) hit a record high Wednesday before sell-off. Elon Musk said he expects Tesla robotaxis in Texas and California by mid-2025. The EV giant's Full Self Driving v13 went out to all customers this past week.

• Novo Nordisk (NVO) crashed 18% on Friday after the Danish pharmaceutical giant reported its experimental weight-loss drug CagriSegma missed expectations in a late-stage trial. Eli Lilly (LLY) and Viking Therapeutics (VKTX) jumped.

• Occidental (OXY) rose 3.9% and Sirius XM (SIRI) gained 12% on Friday following disclosures that Warren Buffett's Berkshire Hathaway purchased shares in the companies in recent days.

• Nike (NKE) reported a sharp earnings drop while revenue fell 8% to $12.4 billion, but both were better than feared. The Dow Jones shoe and apparel giant saw declines across all of its brand segments and sales channels in fiscal Q2, while gross margins fell sharply. New CEO Elliott Hill said that Nike is taking "immediate action" to reposition the business around sports.

• FedEx (FDX) edged past fiscal Q2 EPS expectations while revenue fell short. The shipping giant also guided low on fiscal 2025. But FedEx jumped on plans to spin off its Freight business into a separate public company with the delivery heavyweight in cost-cutting mode.

Hong Kong Market - HSI lost 1.3%

• Hong Kong stocks ended the week lower as investors awaited catalysts after digesting the US Federal Reserve’s hawkish pivot on interest rates next year. The Hang Seng Index (HSI) fell 1.3% for the week.

• To further dampen investor confidence, the People's Bank of China kept its one-year loan prime rate steady at 3.1% and its five-year loan prime rate at 3.6%, in line with expectations from a Reuters poll.

• Tencent's (HK:0700) shares rose 3% after it shared plans to pilot a "Gift a Friend" feature on its self-developed WeChat-based shopping platform, according to an SCMP report.

Singapore Market - STI lost 2.4%

• Singapore's stock market closed off the week in red, as global markets continued to respond to US Federal Reserve's outlook of fewer interest rate cuts in 2025. The STI down 2.4% in the last five trading days.

• Singapore’s main stock index is on track to have its best annual performance since 2017, with STI 15% gain so far this year.

• Even that, investors say the bourse is a shadow of its former self, with delistings outnumbering new listings, the membership less diverse and prominent regional companies such as Grab and Sea going public elsewhere.

Australian Market - ASX lost almost 3%

• The Australian market did exactly what Wall Street did, falling 1.2% on Friday to 8067.7 points – its lowest level since September. That took the loss of ASX for the week to almost 3%, with a broad selloff in banks and consumer discretionary stocks doing the most damage on Friday.

• Not even gold was a safe space to hide in the Australian market with the falling gold price due to the rising US dollar hitting all of the gold miners and particularly shares in Bellevue Gold (ASX: BGL) which shed a hefty 15%.

• A failure in the ASX CHESS batch processing systems meant that payments for trades made on Wednesday, and the transfer of equity ownership title, were initially not going through on Friday as planned.

The Week Ahead

Macro Factors - Could Santa Rally come？

• The holidays are on the corner, after a dramatic week. Investors are set to receive a relative trickle of economic news. Stock and bond markets will close early on Tuesday and remain closed on Wednesday for Christmas.

• Could Santa Claus arrive？Just in time to help stocks end the year on a high note following this week’s selloff.

• December is historically the second-best month in a U.S. presidential election year for the Dow and S&P 500, according to the Stock Trader’s Almanac. On average, the two indexes gain 1.3% and 0.8% on the month, respectively, during such years. That doesn’t seem to be the case this time around. With just a week and a half left to go in the year, the Dow is on track for a losing month, down more than 5%. The S&P 500 is down more than 2% in December, while the Nasdaq is the lone index set to close out the month with a gain, rising nearly 1% so far. Still, the bulk of gains in December usually come in the back half of the month, when a Santa Claus rally, and low trading volumes, could give this year’s monster run one final push toward the finish line.

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