S&P up 25% heading into end of year

Welcome to Seeking Alpha's Wall Street branch, our Sunday look ahead to this week's market moving events, along with the weekend's top news and analysis. Hello, today is Sunday, December 29th, and I'm your host, Kim Kong. It's another holiday shortened week for Wall Street, with markets shut on Wednesday, January 1st. But Tuesday, December 31st, the stock market closing bell rings at 4 p.m. Eastern time as normal, as it's the last trading day of the year. The bond market will close early at 2 p.m. on New Year's Eve, though.

Going into the final two trading days of the year, here's where the major averages stand year to date. The SMP 500 is up 25%, the NASDAQ composite is up 31%, and the Dow is the biggest laggard, but still up 14%. Kazar Alizunya, research strategist at Pepperstone, says the strong annual performance of major indices demonstrates the market's resilience throughout the year.

While the current environment generates some caution is important to frame it within a year of strong gains, the key will be company's ability to maintain profitability in a higher rate environment and the evolution of macroeconomic data guiding future Fed decisions. Looking to other asset classes, spot gold is up 27% for the year, WTI crude is down 1.5%,

Nat Das is up 36%, Copper is up 5%, and Bitcoin is up 112%. Although that doesn't even crack the top 3 for the crypto's best annual returns. The 10-year treasury yield is up 77 basis points, which means the price is down about 20%.

The continued rise in bond yields, driven by the rate assessment of less restricted monetary policy expectations, creates some concern, as Elizundi added. This movement suggests the market is absorbing and processing the notion that the Federal Reserve may maintain a more aggressive stance against inflation than previously anticipated. As a result, equities face a new scenario where the cost of capital may not decrease as much as previously desired, pressuring valuations.

There are no major earnings reports on the calendar for the week, but there will be insight into US manufacturing and the housing market. On Monday, the December Chicago PMIs do. The consensus is for a rise to 42.7, pending home sales figures for November hit the same day, with a 0.9% rise expected. To use day brings the S&P case Shiller Home Price Index, seen rising 4.2%.

Along with the usual jobless claims figures, Thursday has the final measure of the December S&P Global PMI and November construction spending seen on 0.25%. Friday wraps things up with the December ISM Manufacturing Index seen edging down to 48.5.

due to the holiday the December Jazz Report won't be out until the 10th of the month. Steve Englander, strategist at Standard Charter, says the question is how much weakness is needed in December labor data to justify a January FOMC cut. By our reckoning, a higher unemployment rate or non-form payrolls growth of 125k or less should be enough. We see these outcomes as sufficiently likely to justify a January cut.

But the market is pricey in just an 11% chance that the FOMC lowers rates by a quarter point on January 29th. In the news this weekend, a Boeing 737-800 jetliner operated by a South Korean budget airline skidded off the runway and exploited after hitting a concrete wall at an airport Sunday morning in the country's southwest, killing 179 people on board.

Two people have survived according to local authorities. Jeju Air Flight 2216 went off the runway as it landed at Moan International Airport. The aircraft's landing gear wasn't deployed. According to media reports, the pilot made a call minutes after the airport's control tower warned birds were in the area. The flight originated in Bangkok, and all but two passages were South Korean.

The remaining two were Thai nationals. And more than half of the U.S. is an increased risk of power supply shortfalls in the next five to ten years that could lead outages and electricity conservation measures the North American Electric Reliability Corporation said in a recent report.

As US power consumption rises from data centers and the electrification of buildings and transportation, efforts to add electricity generation have fallen short, creating a rising imbalance between supply and demand, and ERC said in its annual long-term reliability assessment.

The mid-continent independent system operator, which operates the electrical grid in 15 states, was at high risk of shortfalls even at normal peak demand periods, and ERC said, while other grid operators, including PJM Interconnection, ISO New England, and operators in Texas and California, are at elevated risk in which shortfalls may happen during extreme heat or cold. For income investors, Deere and Mondalees go extivident on Tuesday. Deere has a payout date of February 10th, and Mondalees pays out January 14th,

and Cisco and America Express go exit of them on January 3rd. Cisco is paying out on January 22nd and MX pays out on February 10th. And in the Wall Street research corner, Wedbush says Palantir and Salesforce appear well positioned to take the lead among software firms in monetizing artificial intelligence applications headed into 2025.

AI spending among enterprises is expected to take up a larger share of IT budgets in 2025. Analyst Dan Ives says, Palantir has been a major focus during the AI revolution with expanding use cases for its marquee products, leading to a larger partner ecosystem with rapidly rising demand across the landscape for enterprise scale and enterprise ready generative AI.

We believe Palantir has a credible path to morph into the next oracle over the coming decade with AIP leading the way as many on the street continue to be huge skeptics of the messy of AI. That's all for today's Wall Street brunch. Look for links to stories in the show notes section. Don't forget, these episodes will be up with transcriptions at SeekingAlpha.com slash WSB. And join the elite community of real investors to an Earth great investing ideas. Just head to SeekingAlpha.com slash subscriptions.