Daily Game Plan

TODAY’S GAME PLAN:  from the trading
desk, this is not research

TODAY’S ECONOMIC DATA:  9:00 a.m ET: S&P/CS Composite-20 HPI

Happy New Year and a prosperous 2025 to you and your loved ones!

Highlights and News:  

• Ukraine’s intelligence service said a naval drone had struck down a Russian military helicopter for the first time and forced another one to return to an airfield after being hit.
• A blackout hit nearly all of Puerto Rico early Tuesday as the U.S. territory prepared to celebrate New Year’s Eve.
• Lionel Messi carried out an IPO of his real estate properties, valuing the portfolio at €223 million.
  
• The Lions beat the 49ers in a rematch of last season’s NFC championship game.
  

Global stocks were mostly higher, with U.S. futures rising, led by tech stocks like MicroStrategy, Palantir, and chip companies. International markets were mixed,
with gains in Hong Kong and France, while the Shanghai Composite fell 1.6%. U.S. equities had a strong year, with the S&P 500 up 24%, the Dow gaining 13%, and the Nasdaq rising 30%. However, many anticipate the rally to slow in 2025 due to high valuations
and the Federal Reserve’s hesitance to cut interest rates. Bitcoin continued its retreat, trading below $94,000 after peaking at $108,309 in December, though it still more than doubled in value for the year. The Dollar Index was steady, on track for its best
year since 2015. Gold rose, poised to finish the year with a 27% gain, while oil climbed on positive economic signals from China. European natural gas prices rose amid concerns over Russian supply disruptions. Despite optimism, global markets remain cautious
due to ongoing geopolitical tensions, including a U.S. Treasury hack allegedly linked to China.

EQUITIES:  

US stock futures edged higher, setting the stage for global equities to mark their fifth annual advance in six years. Boeing edged lower after a 2.3% drop on Monday, following a plane
crash in South Korea involving a Boeing 737-800. Meanwhile, U.S.-listed Chinese companies like JD.com, NIO, and Alibaba rose after President Xi Jinping confirmed China met its 5% economic growth target for 2024. Tesla rebounded 1.3% after a three-day selloff.
Among the biggest US premarket movers, Acadia Pharmaceuticals gained 8.9% after announcing its inclusion in the S&P SmallCap 600. Dave shares fell 7.6% following the Federal Trade Commission’s referral of its case to the Justice Department. EHang Holdings’
ADRs rose 7.6% after reporting fourth-quarter revenue exceeding expectations. Sangamo Therapeutics plummeted 52% after Pfizer ended its collaboration on a hemophilia A gene therapy. Verastem saw a 37% jump after the FDA agreed to review its New Drug Application
for ovarian cancer treatment. Additionally, MicroStrategy (+4.5%), Ametek (+2.2%) saw gains, while U.S. Bancorp (-0.5%) and McKesson (-1.2%) dipped., FTAI Aviation surged 5.9%, while RadNet fell 3.5%. Other notable movers included Ocean Power Technologies
(+40.9%) and Faraday Future (+30.9%)

Futures ahead of the bell: E-Mini S&P +0.3%, Nasdaq +0.3%, Russell 2000 +0.6%, DJI +0.2%

European stocks are on track to end 2024 with modest gains, navigating a year marked by trade tensions and political instability. The UK’s FTSE 100 and France’s CAC
40 rose in thin trading, while major markets in Germany, Italy, and Switzerland remained shut. The Stoxx 600 has gained 5.6% this year, underperforming its historical average of 16% in positive years, as concerns over potential U.S. trade tariffs and political
upheaval in France and Germany weighed on sentiment. Key movers included Wizz Air Holdings, which climbed after projecting growth in 2026, and Galp Energia, which declined after a Namibia well update. Stoxx 600 +0.4%, CAC +0.8%, FTSE 100 +0.6%.

Asian stocks declined on the final trading day of 2024, marking the region’s first quarterly loss of the year as cautious sentiment prevailed. The MSCI Asia Pacific excluding Japan Index
fell 0.4%, with declines led by China and Australia. Mainland Chinese stocks were the weakest performers, with the CSI 300 Index down 1.6% after December manufacturing data missed estimates, though the index is set for its first annual gain since 2020 due
to Beijing’s stimulus measures. Hong Kong’s Hang Seng Index edged higher, while Australia’s S&P/ASX 200 dropped. Analysts remain watchful for potential volatility in early 2025, driven by trade policy uncertainties and China’s economic support measures. Hang
Seng +0.09%, China’s CSI 300 -1.6%, ASX -0.9%

FIXED INCOME: 
 

Treasuries made modest gains as U.S. trading began on the year’s final day, supported by anticipated month-end index rebalancing at 1 p.m. ET. Yields dipped by about
1 basis point across maturities after Monday’s rally, the largest in a month, driven by equity market declines and month-end demand expectations. The 2s10s spread narrowed slightly to 28 basis points, while long-term yields remain near recent highs. Economic
data releases include October housing price metrics and December Dallas Fed services activity.

METALS: 

Gold prices rose, set to end a record-breaking year on a positive note driven by central bank buying, geopolitical tensions, and easing monetary policies. The metal
gained about 26% in 2024, marking its strongest annual performance since 2010, and reached a record high of $2,790.15 in October. With the Federal Reserve signaling fewer rate cuts for 2025 and geopolitical tensions possibly increasing under Trump’s administration,
gold is expected to remain supported in 2025, potentially reaching $3,000 per ounce. Meanwhile, silver rose nearly 22% this year, while platinum and palladium faced annual losses. Gold +0.2%, Silver flat. 

ENERGY:   

Oil prices steadied as Chinese factory activity grew for the third consecutive month, signaling economic recovery following stimulus measures. Brent crude climbed
above $74 a barrel, reducing its annual loss to 3.4%. Despite recovery signs, risks for 2025 include potential oversupply and geopolitical tensions linked to President-elect Donald Trump’s policies, including possible tariffs on China and a renewed pressure
campaign on Iran. Analysts remain cautious, noting the possibility of black swan events or disciplined production cuts that could support prices.WTI +0.01%, Brent -0.01%, Nat Gas -4.2%.

CURRENCIES: 

In currency markets, the US dollar index inched higher, poised for strong annual gains, rising 6.6% on the dollar index and advancing against nearly all currencies.
Supported by higher U.S. Treasury yields and tempered expectations for Federal Reserve rate cuts, the dollar reached a two-year high this year. The yen, despite slight gains Tuesday, was set for a 10% annual drop, its fourth consecutive decline, while the
euro and sterling fell 5.6% and 1%, respectively. Emerging market currencies struggled under the weight of stark interest rate differentials, and the Australian and New Zealand dollars hit multi-year lows. US$ Index +0.07%, GBPUSD -0.1%, EURUSD -0.1%, USDJPY
+0.02%, AUDUSD -0.35%, NZDUSD -0.5%, USDCHF +0.2%.

Bitcoin +3.5%, Ethereum +2.8%

Colors within the report:
Green is always the 200 period (day, week).
Red is always 21,
Blue = 50,
Brown =
100 *Stars have added importance 

Initiations

• Vertex Inc (VERX) Rated New Buy at
  DA Davidson; PT $62

Data sources: Bloomberg, Reuters, CQG