Weekly Market Recap:

This week, U.S. equities faced broad declines. The Dow (-2.25%), S&P 500 (-1.99%), Nasdaq (-1.78%), and Russell 2000 (-4.45%) all ended lower, driven by a sharp midweek selloff. Outperformers included airlines, off-price retail, cruise lines, and apparel retailers. Meanwhile, energy, homebuilders, industrial metals, and chemicals were key laggards. Treasuries weakened as the yield curve steepened. The dollar index rose +0.7%, marking its 11th increase in 12 weeks. Gold fell -1.1%, WTI crude dropped -2.6%, and Bitcoin remained flat.

Corporate Highlights:

• Lennar (LEN -10.6%): Missed on most metrics and announced a spin-off of Millrose subsidiary.

• Micron (MU -12.1%): Cited inventory concerns and NAND oversupply in weak February guidance.

• Vertex (VRTX -14.3%): Trial results for its non-opioid pain treatment underwhelmed.

• Darden Restaurants (DRI +12.5%): Strong Olive Garden and Longhorn results led to boosted FY25 guidance.

• Teva (TEVA +33.9%): Positive data for ulcerative colitis and Crohn’s disease treatment drove gains.

• Qubitekk (QUBT +162.8%): Quantum computing enthusiasm propelled shares higher.

Sector Performance:

Tech (+0.73%) and Utilities (+1.62%) outperformed, while Energy (-5.58%), Real Estate (-4.97%), and Materials (-4.16%) lagged. A hawkish Fed meeting, government shutdown risks, and stretched valuations pressured sentiment. Next week, attention turns to light economic data and a shortened trading week due to the Christmas holiday.

Despite elevated prices for everyday essentials, Americans showed resilience this holiday season, increasing spending by 3.8% from November to Christmas Eve, according to Mastercard SpendingPulse. This figure surpassed last year’s 3.1% growth and even exceeded Mastercard’s earlier forecast of 3.2%. Notably, the final five days of the season accounted for 10% of total spending. Online sales led the charge, jumping 6.7%, while in-person spending grew 2.9%. Clothing sales saw a 3.6% increase, driven largely by online promotions during key shopping days. Electronics, jewelry, and restaurants also experienced notable gains. However, the shorter holiday period—five fewer days between Thanksgiving and Christmas—placed additional pressure on retailers to drive early-season sales. Mastercard’s chief economist, Michelle Meyer, highlighted consumers’ focus on value, as seen in their strategic spending during promotional periods. Retailers also faced challenges from external factors, including heightened attention on the presidential election and significant storms in the Southeast that redirected spending toward automotive needs. While the holiday shopping season reflects a willingness to spend, consumer caution remains evident. Grocery store and restaurant sales showed some softness, hinting at a balanced but cautious outlook. As the season concludes, economists will closely watch broader retail trends and the National Retail Federation’s upcoming data, which is expected to provide deeper insight into Americans’ financial confidence during this critical economic period.

Next Week:

Notable Earnings

• Monday (12/30)

  • Daily Journal Corporation ($DJCO)

  • Evergreen Corporation ($EVGR)

• Tuesday (12/31)

  • Tiziana Life Sciences ($TLSA)

  • Snow Lake Resources ($LITM)

• Thursday (1/3)

  • Ermenegildo Zegna ($ZGN)

  • Sealsq Corp ($LAES)

  • Lifecore Biomedical Inc ($LFCR)

• Friday (1/4)

  • Aehr Test Systems ($AEHR)

  • Radius Recycling Inc ($RDUS)

  • Taylor Devices Inc ($TAYD)

Notable Ex-Dividend Dates

• Monday (12/30)

  • McCormick & Company, Incorporated ($MKC) 2.39%*

  • Micron Technology ($MU) 0.50%

• Tuesday (12/31)

  • Deere & Company ($DE) 1.40%

  • U.S. Bancorp ($USB) 3.88%

  • Humana ($HUM) 1.37%

• Thursday (1/2)

  • Campbell Soup ($CPB) 3.43%

  • Realty Income ($O) 5.70%*

  • Nordson ($NDSN) 1.47%*

• Friday (1/3)

  • American Express ($AXP) 0.93%

  • Cisco Systems ($CSCO) 2.70%

  • Morningstar ($MORN) 0.51%

  • Keurig Dr Pepper ($KDP) 2.75%

*Dividend Aristocrat