The week before the Christmas holiday was full of important news. On Monday, the first important piece of information was released when the Flash Manufacturing PMI and Flash Services PMI came out. It was revealed that the Flash Manufacturing PMI came in at 48.3, which is lower than the expected 49.4 and lower than last month’s 49.7.
This means that manufacturing is still in a period of contraction as it has been for most of 2024. Meanwhile, the Flash Services PMI came in at 58.5, which was more than the projected 55.7 and higher than last month’s 56.7. This implies that the service sector is expanding and is doing so faster than most expected it to, which is also a trend that has existed for most of 2024.
On Tuesday, retail sales data was made public, and the results were mixed depending on what you were expecting. Core retail sales came in at .2 percent for the month, which was lower than the expected .4 percent. Core retail sales includes everything except auto sales, which are considered to be extremely volatile.
Overall retail sales were up .7 percent compared to an expected .6 percent over the past month. Taken together, these data points imply that retail spending may be slumping heading into the start of 2025. This would be interesting considering that the holiday season is the busiest one for retailers and consumers alike.
On Wednesday, the Fed made its final interest rate decision of the year. Although it was an almost foregone conclusion that a cut was coming, there was still plenty of intrigue about where the Fed goes from here. Going into 2025, the Fed Funds rate will stand at 4.5 percent, which is roughly a full percentage point lower than it was to begin 2024.
However, it’s not clear if there will be any rate cuts coming in the first half of 2025. There is some worry that inflation remains sticky and is currently hovering around 2.5 percent, which is higher than the Fed’s target of 2 percent.
On Thursday, the final gross domestic product (GDP) for the third quarter came out and revealed that the economy grew 3.1 percent during those three months. In addition, unemployment benefit claims data came out, and it revealed that 220,000 filed for benefits in the past seven days.
This was compared to an expected 229,000. Finally, on Friday, the core PCE Price Index grew by .1 percent in November compared to an expected .2 percent growth.
The S&P 500 dropped 132 points this week to close at 5,930, which was a loss of 2.19 percent over the past five trading days. On Monday afternoon, the market made its high of the week at 6,079. On Friday morning, the market made its low of 5,853.
The Dow was down 909 points over the past five trading days, which is a loss of 2.09 percent. At Friday’s close, the index stood at 42,840, which is a gain of 15.53 percent compared to this time last year. On Monday morning, the market made its high of the week at 43,900 while it made its weekly low of 42,164 on Friday morning.
Finally, the Nasdaq also lost 2.09 percent to close at 19,572. This week, the index made its high of 20,183 on Tuesday morning and made its low of the week of 19,201 on Friday morning.
This upcoming week is not going to be a busy one for market participants in the United States. As usual, Thursday sees the release of unemployment claims for the past seven days. Otherwise, the Christmas holiday means that Wall Street is going to take an extended break heading into the new year.