After Hours Report

The stock market experienced some turbulence on the first session of the year. The major indices initially moved higher, bolstered by buy-the-dip trading after a soft close to 2024 and some rebalancing activity at the start of the year. Rising rates and mega cap losses drove the major indices lower around mid-day, though. The stock market ultimately closed off session lows and losses weren't very pronounced.

The S&P 500 which traded up as much as 0.9%, closed 0.2% lower. The Nasdaq Composite settled with a 0.2% decline after trading up as much as 1.1% at its intraday high. Small cap stocks outperformed their larger peers, leading the Russell 2000 to close 0.1% higher.

Apple (AAPL 243.85, -6.57, -2.6%) and Tesla (TSLA 379.28, -24.56, -6.1%) extended early declines as the major indices moved to session lows. Apple shares reacted to some cautious comments on iPhone demand from the analyst at UBS. Tesla's weakness followed its Q4 deliveries report, which put a cap on the company's first annual decline in deliveries. Microsoft (MSFT 418.58, -2.92, -0.7%) was another influential loser with no specific catalyst, turning lower after trading up as much as 1.1% at its intraday high.

Losses in the aforementioned names contributed to losses in their respective S&P 500 sectors. The consumer discretionary sector was the worst performer, dropping 1.3%, and the information technology sector logged a 0.2% gain.

Gains in its semiconductor-related components provided some offsetting support to the info tech sector. This price action also led the PHLX Semiconductor Index (SOX) to settle with a 0.8% gain.

The energy sector was a winning standout, jumping 1.0% as commodity prices climbed. WTI crude oil futures settled 1.9% higher at $73.11/bbl and natural gas futures rose 1.6% to $3.15/mmbtu.

Treasuries settled with losses, which contributed to the downside bias in equity indices. The 2-yr yield settled one basis point higher at 4.25% after hitting 4.20% earlier and the 10-yr yield settled one basis point higher at 4.58% after hitting 4.51%.

The ongoing strength in the dollar, which can be a drag on earnings for multinational companies, was another contributing factor in the downside bias. The U.S. Dollar Index was up 0.9% to to 109.33, hitting its highest level since September 2022. This was largely at the expense of the euro (EUR/USD -1.0% to 1.0252), which keeps sinking on growth and policy rate divergences.

• Russell 2000: +0.1% YTD
• Nasdaq Composite: -0.2% YTD
• S&P 500: -0.2% YTD
• S&P Midcap 400: -0.2% YTD
• Dow Jones Industrial Average: -0.4% YTD

Reviewing today's economic data:

• Initial jobless claims for the week ending December 28 decreased by 9,000 to 211,000 (Briefing.com consensus 224,000) while continuing jobless claims for the week ending December 21 decreased by 52,000 to 1.844 million.
  • The key takeaway from the report is the low level of initial claims -- a leading indicator -- as that connotes a situation where employers are reluctant to let employees go, which goes hand-in-hand with an optimistic view of business prospects.
• Total construction spending was unchanged month-over-month in November (Briefing.com consensus 0.2%) following an upwardly revised 0.5% increase (from 0.4%) in October. Total private construction was up 0.1% month-over-month while total public construction declined 0.1% month-over-month. On a year-over-year basis, total construction spending was up 3.0%.
  • The key takeaway from the report is that there wasn't much impulse for construction spending in November, particularly on the nonresidential side of things.
• December S&P Global US Manufacturing PMI - Final checked in at 49.4 versus the preliminary reading of 48.3 and the final November reading of 49.7. The dividing line between expansion and contraction is 50.0, so the December PMI represents activity contracting at a slightly faster pace than the prior month.
• The MBA Mortgage Applications Index was down 21.9% from two weeks before with refinance applications down 36% and purchase applications down 13% (note: this data is usually released on a weekly basis, so the actuals, which aren't necessarily good, also aren't as bad as they appear at first blush)

Looking ahead to Friday, market participants receive the following economic data:

• 10:00 ET: December ISM Manufacturing Index (Briefing.com consensus 48.5%; prior 48.4%)
• 10:30 ET: EIA Natural Gas Inventories (prior -93 bcf)

Overseas:

• Europe: DAX +0.5%, FTSE +1.1%, CAC +0.2%
• Asia: Nikkei closed for holiday, Hang Seng -2.2%, Shanghai -2.7%

Commodities:

• Crude Oil +1.35 @ 73.11
• Nat Gas +0.05 @ 3.15
• Gold +49.40 @ 2668.00
• Silver +0.42 @ 29.84
• Copper unch @ 4.02

After-Hours Spotlight:

• Annaly Capital Mgmt (NLY) authorizes new share repurchase program of up to $1.5 bln; expires on December 31, 2029... NLY up 0.3%
• BJ Restaurants (BJRI) enters into cooperation agreement with Act III Holdings... BJRI up 2.0%
• Resources Connection (RGP) beats by $0.18, beats on revs... RGP up 2.8%

Fair Value for Friday, Jan 3:

• S&P 500: 5,917
• Nasdaq 100: 21,170
• DJIA: 42,687

For a full rundown of today's market and after hours developments, see Live In Play

• Earnings/Guidance (Full Earnings Calendar):
  • H.B. Fuller (FUL) lowers FY24 EPS and adjusted EBITDA guidance; cites weaker than expected conditions and delayed orders
  • Helen of Troy (HELE) announced that the company will now release its third quarter fiscal 2025 results before the stock market opens on Wednesday, January 8, 2025
• General News
  • FBI investigating New Orleans truck attack as act of terrorism; 15 people were killed and dozens more injured
  • Natural gas pipeline from Russia to Europe was stopped after Ukraine refused to renew agreement, according to the New York Times
  • Rep. Thomas Massie needs someone else to join him in order to prevent Rep. Mike Johnson from becoming Speaker of the House, according to the Wall Street Journal
  • Dockworkers will resume negotiations on January 7, according to Bloomberg
  • Pentagon approves $3.64 billion arms deal to Japan for advanced air-to-air missiles and equipment
  • Biden administration to permanently ban new offshore drilling in key coastal waters, defying Trump’s energy agenda, according to Bloomberg
  • Macau Gaming Inspection and Coordination Bureau reported December gross revs -2% yr/yr to HKD 18.202 bln versus +433% in December of 2023
  • Adlai Nortye Ltd. (ANL) CFO tendered her resignation
  • Aeva (AEVA) announces expansion of collaboration with Torc to develop autonomous truck technology
  • Alibaba (BABA) announces disposal of the Alibaba sale shares in Sun Art
  • Altice USA (ATUS): Optimum Announces Update on Carriage of MSG Networks
  • ANI Pharma (ANIP) announces the FDA approval and launch of prucalopride tablets with 180-Day CGT exclusivity
  • Apple (AAPL) offering iPhone discounts, according to Reuters
  • Apple (AAPL): CPSC secures agreement with Apple for enhanced warnings to protect children from hazards of battery ingestion; Apple takes action to address labeling violations on AirTags
  • Applied Optoelectronics' (AAOI) Prime World International Holdings entered into a Construction Contract with Chyi Ding Technologies
  • Arcos Dorados (ARCO) and McDonald’s (MCD) Renew master franchise agreement for 20 years
  • Bitfarms (BITF) issues December 2024 production and operations update; Company earned 211 BTC, up 2% month/month
  • BitFuFu (FUFU) has recently signed a two-year framework agreement with BITMAIN to purchase up to 80,000 S-series miners (including but not limited to the S21 XP and S21 Pro)
  • Boeing (BA): China wants to compete with Boeing and Airbus (EADSY) in airline market, according to Financial Times
  • BYD Company (BYDDY) announces sales and production figures for December of 2024; New energy vehicle sales volume increased 41.23% yr/yr
  • Cameco (CCJ) was informed by its partner, National Atomic Company Kazatomprom JSC and Joint Venture Inkai that as of January 1, 2025, JV Inkai has suspended production activity
  • Cango Inc. (CANG) Announces December 2024 Production Update for Crypto Mining Business
  • Citigroup (C) and Bank of America (BAC) will leave global climate alliance, according to Bloomberg
  • Deutsche Bank (DB) wants to increase fixed income trading business, according to Financial Times
  • HUTCHMED (HCM) receives NDA acceptance in China with Priority Review Status for ORPATHYS and TAGRISSO combination
  • Immunocore (IMCR) appoints Travis Coy, previously a Non-Executive Director, as its EVP, Chief Financial Officer and Head of Corporate Development
  • International Seaways (INSW) determined that it was in the best interests of the Company to terminate the International Seaways Retiree Health and Welfare Plan and distribute all amounts deferred under the Plan to participants
  • Kosmos Energy (KOS) reports first gas at Greater Tortue Ahmeyim LNG Project
  • Ladder Capital (LADR) announces $850 million revolving credit facility to upsize and extend existing facility and reduce cost of debt
  • Li Auto (LI) reports December deliveries increased 16% yr/yr
  • MultiPlan (MPLN) Executive Chair of the Board stepped down from such role and his employment with the Company, effective as of December 31, 2024
  • Neumora Therapeutics (NMRA) reports data from KOASTAL-1 study of navacaprant in major depressive disorder; Study did not demonstrate statistically significant improvement on primary endpoint
  • NIO (NIO) reports December deliveries increased 73% yr/yr
  • Pfizer (PFE): Atavistik Bio enters into research collaboration with Pfizer to accelerate the discovery of novel precision allosteric therapeutics; Financial terms not disclosed
  • Phunware (PHUN) initiated a search for potential candidates to replace CFO Reisner, assigned duties in interim (was effective as of December 31, 2024)
  • SIGA Technologies (SIGA): TEPOXX (tecovirimat) Approved in Japan for the Treatment of Orthopoxviruses
  • SL Green Realty (SLG) agreed to extend Marc Holliday’s term as Chief Executive Officer and Chairman for an additional three and a half years through July 18, 2028
  • Tesla (TSLA) CEO Musk says "We have now confirmed that the explosion was caused by very large fireworks and/or a bomb carried in the bed of the rented Cybertruck and is unrelated to the vehicle itself. All vehicle telemetry was positive at the time of the explosion"
  • Tesla (TSLA) says in Q4 it produced approximately 459,000 vehicles, delivered over 495,000 vehicles and deployed 11.0 GWh of energy storage products – a record for both deliveries and deployments
  • TotalEnergies SE (TTE): Vantage Drilling International Ltd. announces creation of Totalenergies and Vantage Joint Venture Entity
  • Tutor Perini (TPC) announces appointment of Gary Smalley as its New CEO
  • U.S. Steel (X): United Steelworkers Union says Nippon Steel's latest investment / production plan 'does not represent a true commitment to our long-term future'
  • Veradigm (MDRX) extends interim CFO employment through June 30, 2025
  • XPeng (XPEV) reports December deliveries increased 82% yr/yr
  • Welltower (WELL) names John Burkart COO; Tim McHugh as CFO
  • ZEEKR Intelligent Technology (ZK) reports December deliveries increased 102% yr/yr

Ratings Changes (see Upgrades/Downgrades calendar for full list):

• Upgrades:
  • CACI Intl (CACI) upgraded to Outperform from Mkt Perform at Raymond James; tgt $475
  • CBRE Group (CBRE) upgraded to Buy from Hold at Jefferies; tgt raised to $152
  • Cousins Prop (CUZ) upgraded to Buy from Hold at Jefferies; tgt raised to $36
  • Douglas Emmett (DEI) upgraded to Outperform from Neutral at Wedbush; tgt raised to $21
  • EastGroup (EGP) upgraded to Buy from Hold at Jefferies; tgt raised to $194
  • Edison (EIX) upgraded to Overweight from Equal Weight at Barclays; tgt lowered to $84
  • Evergy (EVRG) upgraded to Buy from Neutral at Ladenburg Thalmann; tgt raised to $68.50
  • Equity Lifestyle Properties (ELS) upgraded to Buy from Hold at Jefferies; tgt raised to $80
  • InvenTrust Properties (IVT) upgraded to Buy from Hold at Jefferies; tgt raised to $34
• Downgrades:
  • Alphabet A (GOOGL) downgraded to Mkt Perform from Mkt Outperform at JMP Securities
  • Astera Labs (ALAB) downgraded to Market Perform from Outperform at Northland Capital; tgt $120
  • Biogen (BIIB) downgraded to Neutral from Overweight at Piper Sandler; tgt lowered to $138
  • BXP, Inc. (BXP) downgraded to Underperform from Neutral at Wedbush; tgt lowered to $70
  • CareTrust REIT (CTRE) downgraded to Underperform from Neutral at Wedbush; tgt lowered to $26
  • Check Point Software (CHKP) downgraded to Neutral from Buy at Goldman; tgt raised to $207
  • Crown Castle (CCI) downgraded to Hold from Buy at Jefferies; tgt lowered to $84
  • CubeSmart (CUBE) downgraded to Hold from Buy at Jefferies; tgt lowered to $46
  • Cushman & Wakefield (CWK) downgraded to Hold from Buy at Jefferies; tgt lowered to $14
  • Healthcare Realty (HR) downgraded to Underperform from Neutral at Wedbush; tgt lowered to $16
  • Healthcare Realty (HR) downgraded to Hold from Buy at Jefferies; tgt lowered to $17
  • Hillman Solutions Corp. (HLMN) downgraded to Mkt Perform from Outperform at William Blair
  • Invitation Homes (INVH) downgraded to Hold from Buy at Jefferies; tgt lowered to $33
  • Kimco Realty (KIM) downgraded to Hold from Buy at Jefferies; tgt lowered to $25
• Others:
  • Angel Oak Mortgage REIT (AOMR) initiated with a Buy at Janney; tgt $13
  • Cherry Hill Mortgage (CHMI) initiated with a Buy at Janney; tgt $4
  • Corvus Pharmaceuticals (CRVS) initiated with a Buy at H.C. Wainwright; tgt $11
  • EHang (EH) initiated with an Outperform at CICC
  • Kopin (KOPN) initiated with a Buy at Canaccord Genuity; tgt $2

• Econ Data (Friday):
  • 10:00 ET: December ISM Manufacturing PMI (Briefing.com consensus 48.5%; prior 48.4%)
  • 10:30 ET: EIA Natural Gas Inventories (prior -93 bcf)
• Earnings:
  • Monday (Dec 30)
    • Pre-Market: None
    • After-Hours: None
  • Tuesday (Dec 31)
    • Pre-Market: None
    • After-Hours: None
  • Wednesday (Jan 1)
    • Pre-Market: None
      
    • After-Hours: None
  • Thursday (Jan 2)
    • Pre-Market: None
    • After-Hours: RGP
  • Friday (Jan 3)
    • Pre-Market: None
    • After-Hours: None
General Motors: 5,000 members at GM's Arlington, TX assembly plant join UAW strike