To The Moon

A day after both stocks and bonds got a huge “boost” from cooling core inflation data, it was a quieter session in markets, the day after.

Declines in technology stocks dragged on major indexes Thursday, and Treasury yields dropped for the 3rd straight session.

Despite gains in 8 of 11 sectors, US market still closed broadly lower at 4pm: (see above)

• DJIA: -0.16% (-68.42 TO 43,153.13).

• S&P 500: -0.21% (-12.57 TO 5,937.34).

• Nasdaq: -0.89% (-172.94 to 19,338.29).

A quick glance at the Mag 7 reaffirms these bigwigs’ fall on Thursday.

• $Apple(AAPL)$ : -4.04% (-$9.61 to $228.26).

• $Tesla Motors(TSLA)$ : -3.36% (-$14.40 to $413.82).

• $NVIDIA(NVDA)$ : -1.92% (-$2.62 to $133.62).

• $Alphabet(GOOG)$ : -1.30% (-$2.57 to $194.41).

• $Amazon.com(AMZN)$ : -1.20% (-$2.69 to $220.66).

• $Meta Platform(META)$ : -0.94% (-$5.82 to 611.30).

• $Microsoft(MSFT)$ : -0.41% (-$1.73 to $424.58).

Sectors Performances.

Top 3 performing sectors were dramatically different from Wednesday’s:

• Utilities : +2.53%. There were many posts on utilities being the “it” stock in 2025. Could there be some “truth” in it ? Need to explore.

• Real estate : +2.24%. This is a surprise “win” considering there will only be 2 cut in Fed’s funds rate in 2025. And they should arrive after H1 2025.

• Industrial : +1.21%.

Treasury Yields

US government debt rallied for a 3rd session on Thursday, pushing yields to their lowest closing levels in weeks.

This came about after Fed governor Christopher Waller (in his socialization before FOMC meeting) opened the door to the possibility of 3 or 4 rate cuts in 2025.

And just like that, US Treasury yields fell on Waller's comments

Could governor Waller’s speech be an advance “premonition” that the Fed is prepared to make another 25 basis point cut to the interest rate come Jan 28-29 ? The plot thickens !

Also, investors were tuning in to a Senate hearing for Treasury secretary nominee Scott Bessent for clues about the policy priorities of the incoming Trump administration.

• The 2-year yield ended at 4.237%, the lowest since December 2012.

• Meanwhile, the 10-year rate finished at 4.606% (at press time), the lowest since 03 Jan 2025. (see above)

Economic Reports.

There were 2 economic reports out on Thursday, that might have affected overall US market sentiments.

(1) US retails sales for December 2024.

Thursday also saw the monthly US retail sales report released.

Retail sales rose +0.4% last month after an upwardly revised 0.8% gain in November, the Commerce Department's Census Bureau reported. (see above)

Economists polled by Reuters had forecast retail sales, which are mostly goods and are not adjusted for inflation, advancing 0.6% after a previously reported 0.7% rise in November.

Retail sales increased 3.9% YoY in December.

Overall, Thursday’s sales figures point to a consumer that held up well in the holiday season, supported by wages rising faster than prices and easing underlying inflation during the same December.

(2) US weekly jobless claims.

US weekly jobless claims increased more than expected last week, but remained at levels consistent with a healthy labor market.

Accordingly to the Labour Department report, weekly jobless claims rose by +14,000 to a seasonally adjusted 217,000 for the week ended 11 Jan 2025.

However, the 4-week moving average that smooths choppiness in the data from week to week, dropped to the lowest since April, indicating low levels of dismissals.

Economists polled by Reuters had forecast 210,000 claims for the latest week.

Falling Apples Down The Stairs

Apple Cont’d To Fall Today.

$Apple(AAPL)$ was the biggest loser amongst the Mag 7 on Thursday.

This came about after losing the top spot in Chinese market. (see below)

According to data from research firm Canalys,

• Apple Inc lost its #1 spot in China as domestic rivals took advantage of the iPhone maker’s lack of artificial intelligence features available on phones purchased in the country.

• iPhone shipments in China fell -17% to 42.9 million in 2024, causing Apple to fall to 3rd place in market share.

• Chinese manufacturers Vivo and Huawei leapfrogged Apple into 1st & 2nd place, respectively.

• Apple Intelligence—the company’s AI offering (incorporated into the iPhone 16), —is unavailable on smartphones purchased in mainland China, as it awaits regulatory approval.

Over the past 5 days, Apple has been falling and rising, along market movement.

However, Thursday’s dip was the steepest.

Apple is falling behind in a growing market.

Overall, shipments of smartphones in China rose +4% YoY to 285 million units.

Digging deeper, Apple’s Chinese sales slump deepened to a -25% YoY fall in Q4 2024., with competitor Huawei’s Mate 70 smartphone outshone the iPhone 16 following its launch in the fall.

China is not the only place where Apple looks to have struggled last year.

Counterpoint Research recently reported that Apple’s iPhone unit sales fell -2% worldwide in 2024, while total global smartphone unit sales increased +4%.

These are worrying signs.

Will Apple become a pawn in the US-China power game with a new government in 3 days’ time? Perhaps, Mr Buffett was right to reduce his stake in AAPL earlier on & along with it, the “risk” !

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