US markets struggled over the festive period, giving up some of their hard-fought gains to end the week between Christmas and the New Year lower.
The S&P 500 and the Nasdaq remain slightly above their pre-election levels, but the Dow Industrials and the broad Russell 2000 index are more or less flat on where they were two months ago.
Still, that shouldn’t detract from the fact the S&P 500 had a blowout 2024, gaining more than 20% for a second consecutive year, which hasn’t happened since the 1990s.
Thanks to optimism over the US economy and corporate profits, analysts are predicting a further 10% rise in US stocks this year which is actually in line with the historical average.
However, forecasts are seldom accurate as markets tend to be more volatile and with president Trump set to take office later this month there is still a great deal of uncertainty over how 2025 will pan out.
TESLA
Shares in electric vehicle-maker Tesla (TSLA:NASDAQ) fell 6% on the first day of trading in 2025, more than any other S&P 500 stock, after the company reported lower-than expected car deliveries for the fourth quarter.
That miss meant full-year sales of 1.79 million vehicles also missed expectations, allowing Chinese arch-rival BYD (1211:HKG) to close the gap as it reported sales of 1.76 million units.
If there was a silver lining to the update, it was that Tesla’s sales in China – the world’s largest car market – hit a record high both in December and for the year.
US BANKS
In just over a week’s time, Wall Street’s finest – including JPMorgan Chase (JPM:NYSE), Citigroup (C:NYSE) and Goldman Sachs (GS:NYSE) – are due to reveal their earnings for the fourth quarter and full-year 2024 and there are plenty of reasons to expect they will be upbeat.
Trading volumes across various asset classes, including cryptocurrencies, have been hitting record levels in the final quarter of the year driven by strong interest from retail investors.
‘Momentum across retail trading is building off a strong equity market in 2024, solid account growth and new product offerings,’ says Jefferies analyst Daniel Fannon, who sees demand from small investors rising at the same time as regulatory barriers are easing and trading hours have been extended.
Meanwhile, corporate activity has also experienced a pick-up thanks to healthy deal backlogs at investment banks and maturing private equity portfolios so capital markets revenues are also expected to show a marked increase.
