Monday, January 6, 2025

It was a mixed session on this first trading day of the first full trading week of 2025. The Nasdaq and S&P 500 notched positive closes for the second straight day, while the Dow and small-cap Russell 2000 were modestly lower. The Dow slipped -25 points, -0.06%, with the S&P +32, +0.55%. The Nasdaq won the day, +246 points or +1.25%, while the Russell was -0.12%.

The tech-heavy Nasdaq saw semiconductor leader NVIDIA NVDA close at new all-time highs: $149.43 per share. This, not coincidentally, comes ahead of NVIDIA CEO Jensen Huang’s keynote address at the Consumer Electronics Show (CES) this evening — which has, in the past, managed to move markets based on Huang’s perceptions of the current tech market. NVIDIA shares are up +189% over the past year.

After the market open this morning, we saw two economic prints which both suggest a cooling in conditions — one on the Services sector and one on manufacturing business. Further, the first of these is a December number, while the manufacturing report depicts conditions in November of last year.

S&P Services PMI — the final read — for December reached 56.8 today, ahead of the downwardly revised 56.1 from the previous month, but notably below the 58.5 originally reported for November. This is still the highest print since March of 2022, so the downward revision doesn’t look to have any outsized negative impact. 

Employment in the Services sector increased modestly, but it was the first uptick in the past five months. Easing cost pressures on favorable recent inflation levels helped this bloc of the economy, along with an 18-month high in business confidence. Much of this is forecasting greener pastures from an upcoming second Trump administration.

Factory Orders for November slipped to -0.4% from an expected -0.3%, down from an upwardly revised +0.5% the previous month. This is the fourth month in a row we’ve seen these numbers within +/-1% either way, and the sixth month in 11 of a negative monthly read. Durable goods-producing industries fell -1.2% for the month; non-durables gained +0.4%.

Aside from ISM Services data for December out after tomorrow’s opening bell and the U.S. Trade Deficit before it, we’ll also see Job Openings and Labor Turnover Survey (JOLTS) numbers for November. This will be the first labor-related print in what we call Jobs Week. Expectations are for a steady 7.7 million open jobs in the labor market for that month, generally where we’ve settled since June of last year.

ISM Services are expected to climb slightly to +53.4% for last month, up from the previously reported +52.1% and still above the 50 threshold between growth and contraction. The Trade Deficit is expected to sink further, to -$78.4 billion from -$73.8 billion — still better than the -$83.8 billion reported in September of last year, and the all-time record low -$101.9 billion back in March 2022.

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