Market Data as of Week Ending: 12/27/2024 unless noted otherwise
Equity indexes ended the last full week of 2024 higher. Stocks carried last Friday’s rally into the holiday but pulled back in the latter half of the week. Size trends remained consistent, with large-cap stocks outperforming mid- and small-caps, though style returns were mixed. Large growth was the top-performing size and style for the week, contributing to year-to-date outperformance, and recorded an impressive 36.15% increase in 2024. Nine out of eleven S&P 500 sectors were higher last week, with energy being the best-performing sector. Foreign markets also ended the week higher, as developed markets were boosted by strong gains in Japanese stocks, and emerging markets rose with expectations that Chinese officials will announce another round of stimulus.
Fixed-income markets were lower last week as yields continued to climb. The 10-year yield ended the week at 4.62%, approaching year-to-date highs. Short-duration bonds outperformed long-duration bonds, and high-yield bonds outperformed government and corporate bonds. The 2-10-year yield curve continued to steepen, ending the week at 0.32%. Investment-grade corporate bond yields and high-yield bonds both saw marginal increases, ending the week at 5.37% and 7.65%, respectively.
Economic data for the shortened holiday week was limited and lacked any significant surprises. Housing data from November was encouraging. The U.S. Census Bureau reported that new residential home sales increased 5.9% from October, with a lower median sales price of $402,600. Meanwhile, the National Association of Realtors reported that existing home sales rose 4.8% from the previous month, but the inventory of unsold existing homes fell 2.9% to 1.33 million, representing a 3.8month supply. New orders for manufactured durable goods decreased 1.1% in November, versus a consensus estimate of a 0.2% increase. However, orders for nondefense capital goods, excluding aircraft, were up 0.7%, the largest rise since August 2023. Consumer confidence dropped 8.1 points in December to 104.7. While assessments of the present situation were modestly lower, the short-term outlook for income, business, and labor conditions dropped 12.6 points to 81.1. Initial jobless claims of 219K were lower than the previous week and below market expectations.