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On Monday, January 1, 2025, the S&P 500 Index closed down by -0.35%, the Dow Jones Industrial Average down -0.45%, and the Nasdaq 100 Index down -0.25%. This decline was influenced by higher bond yields, with the 10-year Treasury note yield reaching a 2.25-month high of 4.19% and finishing at 4.17%. The markets are anticipating a 99% likelihood of a -25 basis point rate cut in the federal funds target range during the upcoming FOMC meeting on Wednesday, which may support stock prices.
In major corporate news, Confluent surged over +29% following its acquisition by IBM for approximately $11 billion, while Carvana rose more than +12% after being announced as a replacement for LKQ Corp in the S&P 500, effective December 22. Q3 earnings reports reveal that 83% of S&P 500 companies exceeded forecasts, with earnings rising +14.6%, surpassing expectations of +7.2%.
Chinese trade data released on Monday showed November exports up +5.9% year-on-year, exceeding estimates of +4.0%, while imports rose only +1.9%, below expectations of +3.0%. In Europe, economic indicators displayed mixed results; Germany’s industrial production in October rose +1.8% month-on-month, significantly above the +0.3% anticipated.
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