The Monthly Market Wrap provides an insightful analysis of treasury yields, fixed income performance, mega-cap stocks, and key economic indicators in December 2024. It also delves into housing market data and the performance of commodities.
Key Stock Market Index Performance
Equities posted mixed results in December to close out 2024. The price-weighted Dow Jones Industrial Average sank 5.1% as UnitedHealth Group (UNH), Sherwin-Williams (SHW), and Caterpillar (CAT) all posted double-digit declines in December. The market cap-weighted S&P 500 fell 2.4% and the Nasdaq Composite rose 0.6%. Small-caps had a particularly tough end to the year, as the Russell 2000 tumbled 8.3% in December.
Nonetheless, all three major US indices had a formidable 2024. The Dow rose 12.9%, the S&P 500 advanced 23.3%, and the Nasdaq surged 28.6%.
Only one sector had a positive December — Consumer Discretionary, which gained 1.1%. The worst-performing sector in December was Materials, which plummeted 10.8%.
Economic Data
Employment
The unemployment rate ticked higher to 4.2% between October and November, and the labor force participation rate fell 0.1 percentage points to 62.5%. November nonfarm payroll data showed that the U.S. economy added 227,000 jobs this month, a rebound from October’s print of 36,000, which was the lowest monthly jobs figure since December 2020.
Inflation vs. Fed Funds Rate
The US inflation rate inched higher to 2.75%, while core inflation was virtually unchanged at 3.33% for November. Core inflation YoY has remained rangebound between 3.31% and 3.33% over the last three months. The US Consumer Price Index rose 0.31% month over month, and US Personal Spending increased by 0.40%.
The Federal Reserve cut its key Fed Funds Rate by 25 basis points at the FOMC’s December 18th meeting. This lowered the Fed Funds Rate down to 4.25%-4.50% from 4.50%-4.75%, and marks the third rate cut since March 2020.
Housing Prices and Mortgage Rates
US New Single-Family Home Sales rebounded with a 5.9% MoM increase in November after plummeting 14.8% in October, which was the largest monthly decline since July 2013.
Existing Home Sales increased 4.8% MoM, marking its second consecutive monthly increase. The Median Sales Price of Existing Homes remained relatively unchanged month over month, as did mortgage rates. The 15-year Mortgage Rate ended December at 6.00%, while the 30-year settled slightly higher MoM at 6.85%.
Bitcoin More Than Doubled in 2024
Cryptocurrencies gave back some of their November gains in December. The price of Bitcoin fell 5% in December, down to $92,627.28, while Ethereum slipped 6.6% to close the year at $3,359.51. Nonetheless, Bitcoin more than doubled in 2024, surging 119.4% as Ethereum rose 46.4% in the year.
Fixed Income
Short-term treasury yields fell following the Fed’s December 18th rate cut, while longer-term yields climbed higher. The 1-month fell by 36 basis points while the 30-year rose by 42 basis points at the opposite end of the curve.
Bond funds also posted a mixed December as a result of the mixed yield movement. The SPDR Bloomberg 1-3 Month T-Bill ETF (BIL) added 0.4%, while the iShares 20+ Year Treasury Bond ETF (TLT) sank 6.4%.
Bautis Financial LLC is a registered investment advisor. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial advisor and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.