12/24/24

Stocks climb in 2024’s most widely-shared rally

‘Twas the night before Christmas, and not a trader was stirring: total volumes across the US tape were the second-lowest of the year, trailing only July 3. Stocks rallied in light trading with the S&P 500 up 1.1%, the Nasdaq 100 gaining 1.4%, and the Russell 2000 advancing by 1% in the half-day of trading.

Every S&P 500 sector ETF rose, from healthcare on the low end to consumer discretionary at the top of the leaderboard as Tesla was the most heavily traded stock and the biggest gainer on the benchmark US stock index. Financials also put in a gain of more than 1%.

The advance-decline line for the S&P 500 was a whopping +415, its best reading of 2024.

Only two stocks in the entire index fell by 1% or more: Walgreens Boots Alliance and Celanese.

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Nia Warfield, Luke Kawa

S&P 500 and Nasdaq 100 end the week with fresh record closing highs

Another day, another record high for US stocks.

Luke Kawa8h

We’re about to enter the historically worst week of the year for US stocks

The September scaries — the tendency for US stocks to perform poorly in the ninth month of the year — have seemingly been vanquished this year. So far.

However, Brent Donnelly, president of Spectra Markets, was very early in highlighting a peculiar calendar quirk that implies some potential downside risk for next week.

Monday marks the start of the 39th trading week of the year. That’s historically been the worst week for the S&P 500, based on data going back to 1990, and the week that’s seen the highest incidence of 1% drops for the benchmark US stock index.

“Meanwhile, the week after next is the one where stocks are most likely to have a moment,” he wrote on September 11 (last Thursday). “There is something special about the week after September expiry and this has been true for basically ever. Could be a bit of the old fooled by randomness, but anyway.”

Median return of S&P 500 by week — Source: Brent Donnelly, Spectra Markets

% of time S&P 500 sees weekly drop of 1% or more — Source: Brent Donnelly, Spectra Markets

Donnelly also separately flagged, though, that seasonality has not been that useful of a trading tool this year:

“2025 has not been good for the seasonality believers. My view is that seasonality functions mostly because of asymmetry of flows and human behavior around specific times of the year and political and macro shocks are bigger than those flows. So if you have a series of randomly-timed policy shocks month after month, that will blow the flows and the behavioral seasonality out of the water. That’s my explanation for why seasonality has not worked this year. But I could be wrong.”

Luke Kawa10h

Retail traders’ favorite stocks are on a record winning streak

Relatively speculative small-cap stocks, many of which are beloved by retail traders, are basking in the glow of the renewed Federal Reserve rate cuts.

A Goldman Sachs basket of stocks widely held by the retail community is going straight up and to the right, poised for a record 10th straight day of gains. It’s up 13% over this stretch.

Fed rate cuts provide a more supportive financing environment for smaller firms, and as such, a lower risk of default.

Quantum computing companies Rigetti Computing and D-Wave Quantum, which are both constituents in the aforementioned basket, are up big on Friday on little news. However, there is one report from Cyberscoop that the US government “is considering a broader set of actions related to quantum computing, both to improve the nation’s capacity to defend against future quantum-enabled hacks,” which may be spurring some buying activity.

On Thursday, Rigetti and IonQ announced fresh initiatives with the government.

Also enjoying big gains are classic meme stocks AMC Networks and SoundHound AI, both of which are not in Goldman’s group but also often receive a ton of retail attention.

For AMC at least, there’s a more fundamental catalyst at play: the theater chain announced that it’ll be hosting release parties for the upcoming Taylor Swift album, “The Life of a Showgirl.”

Nia Warfield10h

FedEx pops after delivering Q1 earnings beat and receiving price target boost

FedEx shares rose Friday after the courier giant delivered better-than-expected fiscal Q1 results.

The company posted adjusted earnings of $3.83 a share, topping Wall Street’s $3.61 call. Revenue hit $22.2 billion, also ahead of forecasts, thanks to strong US delivery volumes, even as tariff pressures weighed on its international business.

Looking ahead, FedEx gave a full-year outlook calling for 4% to 6% sales growth and adjusted EPS between $17.20 and $19. That stacks up against Street expectations of 3.3% sales growth and EPS of $18.34. The company also reiterated plans to spin off its freight arm by mid-2026.

The stock got a price target boost from TD Cowen, which inched its estimate up to $271 from $269 while keeping a “buy” rating.

Even with Friday’s pop, FedEx shares are still down about 17% this year.

Luke Kawa11h

Micron’s record-setting winning streak ends with a thud

Gravity has come for Micron.

The memory chipmaking specialist has been on an unreal run, rising for a record 12 consecutive sessions before Friday’s plunge.

The stock had been buoyed by the continued drumbeat of positive news regarding the expansion of AI data centers, rising more than 40% during its streak of up days. Its winning streak had pushed shares above Wall Street analysts’ average price target.

The company reports earnings next week.

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