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Economic & Earnings Commentary
It’s Christmas Eve, and the markets are open until 1pm ET today. There are no economic reports on the calendar for this morning, the November monthly read on Durable Goods Orders having been pulled forward from initially scheduled for a Tuesday release.
Durable Goods Orders Lower than Expected
For the fourth month in the past six, we see a negative headline on Durable Goods Orders. For November, it was -1.1%, below the +0.3% expected and the +0.8% reported for the prior month. Ex-transportation, this also swung to a negative -0.1% from a +0.2% in October.
The prior months in 2024 enjoyed a string of positive durable goods orders, peaking at +9.8% back in July. Durable Goods usually hover around a zero balance overall; we don’t put too much stock in a slightly negative print here, but it’s worth remembering if we continue to slide in the months to come.
Consumer Confidence Down Slightly
We also saw a December read on Consumer Confidence Monday, where the headline figure came in cooler than expected. The Conference Board registered 104.7 for the current month, down -8.1 points month over month. Meanwhile, the Present Situation Index — how consumers feel business and labor is performing — dropped -12.6 points to 81.1 (the report notes that a print of 80 suggests consumers are wary of a coming recession).
There is nothing here to directly indicate a sure downward turn in the general economy. We will see a new presidential administration soon, one which promises big changes on the federal level, designed to disrupt plenty of the status quo. The stock market has priced in an upward swell to at least some of these changes, but with four weeks to go before President-elect Trump re-takes office, investors will have plenty of time to second-guess everything.
What to Expect from a Christmas Eve Stock Market
Obviously, many market participants are away today, so trading volumes will likely be low. The Dow is riding a three-day winning streak, but it’s a modest rally mostly filling in potholes from nearly two-full weeks of lower closes every afternoon. The Dow is -24 points at this hour, adding a little red to the green for the S&P 500, Nasdaq and small-cap Russell 2000 this morning.
All major indexes are lower over the past week of trading, thought the Nasdaq is still +4.4% over the past full month. Bond yields continue to clamber higher — now 4.61% on the 10-year and 4.35% on the 2-year. We’re also seeing the spread on these yields pull a little further apart; for most of the past two years, this yield rate curve was inverted (a red flag for a recession that never came). But the bond market has begun to price in a slower Fed dot-plot, among other things.