Megacap tech stocks powered a much-needed rally on Friday.

⚡ Closing Bell:

• Dow Jones: ⬆️ +1.1% – joined the action, closing at 43,845.

• S&P 500: ⬆️ +1.3% – snapping its longest losing streak since April.

• Nasdaq 100 and Russell 2000: matched strides ⬆️ +1.7%

Sector Snapshot:
Nine out of 11 S&P 500 sectors pushed higher.
✅ Consumer discretionary, tech, and real estate led the charge, each booking gains of over 1%. Meanwhile, consumer staples and materials barely missed the green.

Big Tech’s Big Day:
The Magnificent 7 stocks rallied ⬆️ +2.4%, spearheaded by Tesla ($412.82, ⬆️ +8.3%) and Nvidia ($145.00, ⬆️ +4.5%).

• Super Micro Computer stole the spotlight, soaring ⬆️ +10.9%, making it the day’s top S&P 500 performer.

EV Stocks Shift into High Gear:
Automakers revved up as impressive EV sales data electrified the sector:

• Rivian ($16.45, ⬆️ +24.5%) had its best day since its IPO.

• Ford ($9.89, ⬆️ +2.4%) and GM ($51.86, ⬆️ +0.7%) also joined the party.

Not All Bright Spots:

• US Steel ($30.75, ⬇️ -6.6%) stumbled after President Biden blocked Japan’s Nippon Steel from acquiring the company.

Dollar Dips 💵:
The US dollar softened against all G10 currencies except the Canadian dollar.
For equities, this respite from dollar strength was a welcomed breather.

❗ Can the bulls keep the momentum? Let’s see how the rest of January shapes up!

#TRUTH:
❗❗❗ “If you can’t do the little things right, you will never do the big things right.” ~ Admiral William H. McRaven

The Week Ahead:

The U.S. labor market cooled in 2024 but remains stable, with the Federal Reserve confident about its gradual progress.

Key Takeaways:

• December jobs report expected to show 153,000 new jobs, down from November’s 227,000.

• Unemployment rate forecast to hold steady at 4.2%.

• Fed Chair Powell described the labor market as “looser than pre-pandemic” but cooling “gradually and orderly.”

• Analysts see the labor market as stable, with no sudden softening since last summer.

Rate Outlook: Markets only see an 11% chance of a rate cut at the Fed’s January meeting, reflecting cautious optimism about the economy’s path.

❗Tip: Keep an eye on the labor market data for hints on the Fed’s next moves. It could set the tone for early 2025 trading.

Weekly Market Rundown

Monday – 1/6

• What to Watch:

  • Manufacturing PMI: 58.3 expected (58.5 prior)

  • Composite PMI: 56.6 prior

  • Factory Orders: -0.3% expected (+0.2% prior)

  • Durable Goods Orders: -0.3% expected (-1.1% prior)

• Earnings: None

Tuesday – 1/7

• What to Watch:

  • Job Openings (JOLTS): 7.7M expected (7.74M prior)

  • ISM Services Index: 53.1 expected (52.1 prior)

• Earnings Spotlight: Cal-Maine Foods ($CALM)

Wednesday – 1/8

• What to Watch:

  • Mortgage Applications: Weekly data

  • ADP Private Payrolls: +130K expected (+146K prior)

  • Fed Minutes: December’s meeting recap

• Earnings Spotlight: Albertsons ($ACI), Helen of Troy ($HELE), Jefferies ($JEF)

Thursday- 1/9

• What to Watch:

  • Job Cuts (YoY): +26.8% prior

  • Initial Jobless Claims: 211K prior

• Earnings Spotlight: KB Home ($KBH)

Friday- 1/10

• What to Watch:

  • Nonfarm Payrolls: +153K expected (+227K prior)

  • Unemployment Rate: 4.2% expected (4.3% prior)

  • Average Hourly Earnings (MoM): +0.3% expected (+0.4% prior)

  • Average Hourly Earnings (YoY): +4.0% expected (+4.0% prior)

  • Labor Force Participation Rate: 62.5% prior

• Earnings Spotlight: Constellation Brands ($STZ), Delta ($DAL), Tilray ($TLRY), Walgreens Boots Alliance ($WBA)

AI + energy boom

The year is young, but the AI + energy boom is already defining the early trading days of 2025. The top gainers of the S&P 500 reveal a clear trend: nuclear energy, data centers, and AI-related investments are stealing the spotlight.

Top Gainers

① Vistra Corp ($VST) ⬆️ 8.48% and Constellation Energy ($CEG) ⬆️ 4.12% — Last year’s 2nd and 10th best performers, these nuclear energy players surged higher as AI data centers’ power demand skyrockets.

② Texas Pacific Land ($TPL) ⬆️ 2.70% — Traditionally an oil & gas land leaser, it’s now eyeing data center development on its sprawling West Texas properties.

③ Super Micro Computer ($SMCI) ⬆️ 10.88% — Hardware is hot again, as this server maker rebounds with AI-tailored products.

④ NRG Energy ($NRG) ⬆️ 6.17% — Another nuclear energy name energized by demand forecasts.

⑤ Nvidia ($NVDA) ⬆️ 4.54% — No surprise here. The AI chip giant remains a market darling.

⑥ GE Vernova, Western Digital, Uber, and Micron round out the leaderboard, reflecting tech, renewables, and AI-powered optimism.

The Bigger Picture

• AI Spending Frenzy: Microsoft announced plans to pour $80 billion into AI data centers in fiscal 2025 alone. That’s a lot of chips, servers, and energy.

• Energy-Driven Demand: AI’s hunger for power is fueling a renaissance in nuclear and renewable energy stocks, with companies like First Solar and Enphase Energy also climbing.

❗The Contrarian View

Amid the euphoria, some skeptics see echoes of the late-1990s tech bubble, where overinvestment led to a painful bust by 2001.
Could history repeat itself? Maybe—but for now, the mantra seems to be: “This time, it’s different.”

As the AI arms race heats up, so too does the debate: visionary opportunity or another bubble waiting to pop?

Detroit Powers Up ⚡:

It’s a bright start to the year for Detroit’s auto giants as Q4 EV sales figures roll in:

• Ford ($F 9.89 ⬆️ +2.44%) reported a 35% jump in full-year EV sales.

• GM ($GM 51.86 ⬆️ +0.74%) outpaced its rival with a staggering 50% surge.

Meanwhile, Tesla ($TSLA 412.82 ⬆️ +8.30%)—despite its stock’s strong rebound—saw its full-year EV sales dip slightly, ending 2024 on a flat note.

① Ford’s EV growth marks a much-needed win for the automaker, but the climb remains steep. Years of costly quality control issues have left it trailing behind Tesla and GM, eating into margins.

② For GM, the sales surge cements its position as a key contender in the EV race, adding momentum to its market push.

Tesla’s minor sales stumble? Likely a blip on the radar for the EV pioneer, as its stock performance shows investors aren’t hitting the brakes just yet.

Gains Traction:

Oil prices are riding a three-month high, buoyed by Middle Eastern supply dynamics and strong demand from Asian refiners.

• Brent is trading just below $76, its highest since October.

• WTI is close behind, hovering around $74.

What’s driving the surge?
Tight supplies from Iran and Russia have Asian buyers pivoting to Middle Eastern crudes like Oman and Dubai, sending prices higher. Meanwhile, falling U.S. stockpiles and geopolitical uncertainties tied to Donald Trump’s return to the White House have added bullish momentum.

Challenges ahead:
Analysts at Morgan Stanley predict a 700,000 barrels/day surplus in 2025 as supply outpaces demand growth. Rising output from OPEC and other producers, coupled with tepid Chinese demand, could weigh on prices.

Saudi Arabia’s upcoming official selling prices will be the next big indicator, offering clues on whether the rally has legs or if the market might anchor closer to $70 for Brent.

The question: Can oil maintain its climb, or is a pullback on the horizon?

Commodities Check: ✔️

• WTI Crude: ⬆️ +1.3% to $74.08 per barrel. Energy bulls holding strong.

• Natural Gas: ⬇️ -8.03% to $3.37/MMBtu.

• Gold: ⬇️ -0.3% to $2,639.50/oz.

• Silver: ⬇️ -0.6% to $29.63/oz.
  

The Dollar:

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The stinger

Disclaimer

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