Category: Market

Trump’s First Actions and Job Data to Test Market in January

Trump's First Actions and Job Data to Test Market in January

Sunday, 29 December 2024 06:15 AM EST

After closing the books on a banner year for U.S. stocks, investors expect to ride seasonal momentum into mid-January when a slew of economic data and a transition of power in Washington could send markets moving.

The S&P 500 rose roughly 25% in 2024 through Dec. 27, while the technology-heavy Nasdaq Composite index <.IXIC>, which surpassed 20,000 for the first time in December, is up more than 31%.

On Friday, however, stocks sold off amid some profit taking and questions about how markets might perform in January, according to analysts and traders.

"There are concerns that maybe the first part of (next) year could involve some repositioning and reallocation of funds and those that are trading today and next week are probably just trying to get a little bit ahead of that," said Robert Pavlik, senior portfolio manager at Dakota Wealth.

Stocks tend to do well in the last five trading days of December and into the first two days of January, a phenomenon dubbed the Santa Claus rally, which has driven S&P gains of an average of 1.3% since 1969, according to the Stock Trader's Almanac.

Despite the Friday selloff, for the last five trading sessions, the S&P rose 1.77%, while the Nasdaq was up 1.8%.

Just how long upward momentum lasts will depend on several forces that could help drive markets in 2025.

Monthly U.S. employment data on Jan. 10 should give investors a fresh view into the health and strength of the U.S. economy. Job growth rebounded in November following hurricane- and strike-related setbacks earlier in the year.

The market's strength will be tested again shortly after, when U.S. companies start reporting fourth-quarter earnings.

Investors anticipate a 10.33% earnings per share growth in 2025, versus a 12.47% expected rise in 2024, according to LSEG data, although excitement over President-elect Donald Trump's policies is expected to boost the outlook for some sectors like banks, energy and crypto.

"There's the hope that taxes and regulations will be lowered or reduced next year, and that will help support corporate profits, which are what drive the market in the first place," said Michael Rosen, chief investment officer at Angeles Investments.

Trump's inauguration on Jan. 20 could also throw the markets a few curve balls. He is expected to release at least 25 executive orders on his first day on a range of issues from immigration to energy and crypto policy.

Trump has also threatened tariffs on goods from China and levies on products from both Mexico and Canada, as well as plans to crack down on immigration, creating costs that companies could ultimately pass on to consumers.

Helen Chen, associate director of trading at Monex USA, said a new administration always brings with it a large degree of uncertainty. There is also a good chance the impact of the Trump administration's expected trade policies is far from fully priced into global currency markets, she added.

"We're looking ahead to see which of those proposed policies are enacted, which might be further down the pipeline," Given said, adding she expected a big impact on the euro, Mexican peso, the Canadian dollar, and the Chinese yuan.

The conclusion of the Federal Reserve's first monetary policy meeting of the year in late January could also present a challenge to the U.S. stock rally.

Stocks tumbled on Dec. 18 when the Fed implemented its third interest-rate cut for the year and signaled fewer cuts in 2025 because of an uncertain inflation outlook, disappointing investors who had expected lower rates to boost corporate profits and valuations.

Still, that could be good for alternative assets like cryptocurrencies. The incoming crypto-friendly Trump administration is adding to a number of catalysts that are boosting crypto investors' confidence, said Damon Polistina, head of research at investment platform Eaglebrook Advisors.

Bitcoin surged above $107,000 this month on hopes of friendlier Trump policies.

N.Y. Legislators Approve $237B Budget Addressing Surge Of Migrants, Plans To Jump-Start Housing Market

N.Y. Legislators Approve $237B Budget Addressing Surge Of Migrants, Plans To Jump-Start Housing Market

FILE - The New York state Assembly Chamber is seen during a legislative session after Gov. Kathy Hochul presented her 2025 executive state budget at the state Capitol, Jan. 16, 2024, in Albany, N.Y. New York lawmakers passed a $237 billion state budget Saturday, April 20, that includes plans to spur housing construction and combat unlicensed marijuana stores. (AP Photo/Hans Pennink, File)
FILE – The New York state Assembly Chamber is seen during a legislative session after Gov. Kathy Hochul presented her 2025 executive state budget at the state Capitol, Jan. 16, 2024, in Albany, N.Y. New York lawmakers passed a $237 billion state budget Saturday, April 20, that includes plans to spur housing construction and combat unlicensed marijuana stores. (AP Photo/Hans Pennink, File)

OAN’s Elizabeth Volberding
10:32 AM – Sunday, April 21, 2024

SEE: https://www.oann.com/newsroom/n-y-legislators-approve-237b-budget-addressing-surge-of-migrants-plans-to-jump-start-housing-market/; republished below in full, unedited, for informational, educational, & research purposes:

A $237 billion state budget that includes measures to encourage home construction and combat unauthorized marijuana stores was approved by New York lawmakers over the weekend.

The package addresses a recent surge of immigrants, expedites the closing of some state prisons, and maintains the policy of allowing people to purchase takeout drinks during the pandemic.

The state Senate and Assembly approved a number of budget bills on Saturday. The budget now goes to Governor Kathy Hochul (D-N.Y.), who is anticipated to sign it into law.

Additionally, $2.4 billion has been set aside by state authorities to assist with the large number of immigrants in New York City’s homeless shelters. The funds will be used for the immigrant population’s housing, legal needs, and medical treatment.

Lawmakers also took action in response to the growing number of unauthorized cannabis shops in New York City. The state has found it difficult to close the stores, which have proliferated throughout the Big Apple, due to bureaucratic obstacles.

The budget also contains provisions that would make it easier for local law enforcement to close down establishments suspected of selling marijuana illegally while their legal cases are pending, which would help address the issue. Previously, the state was solely responsible for the majority of enforcement, and these types of establishments could remain open while a drawn-out appeals process took place.

Hochul and leading legislative leaders engaged in private negotiations that centered mostly around a comprehensive plan to stimulate the state’s housing market.

Developers who agree to rent a share of the units in new buildings below the market rate will receive a tax benefit under the plan. Though not as extensive as many advocates had hoped, the agreement also contains protections against evictions and unjustified rent increases for some residents.

Governor Hochul made a statement after the budget’s passage, saying:

“In my State of the state, I promised New Yorkers we’d fight to build more housing, improve education and protect public safety — and that’s exactly what our budget is going to do.

“This budget agreement represents the most significant improvement in housing policy in three generations. This includes transformative investments in health care and education that will put our state on the path to fiscal stability. It will end co-pays for insulin, establish first-in-the-nation paid prenatal leave, and launch the EmpireAI consortium. This budget cracks down on retail theft and gives us new tools to shut down illicit cannabis storefronts. It helps the children of New York City by extending mayoral accountability for public schools. We got it all done without raising income taxes by a single cent. 

“I’m grateful to Speaker Heastie, Leader Stewart-Cousins and my colleagues in the Legislature for their collaboration on this agreement, and look forward to continuing to work together.”

During floor debates, state Senate Republican Leader Rob Ortt (R-N.Y.) attacked the proposal, claiming it would attract more illegal migrants to New York.

“We made a lot of tough decisions in this budget,” Ortt said. “But 2.4 billion goes a long way, and I just wonder what that could have done in other parts of the budget for legal New Yorkers.”

Additionally, in an effort to conserve money in light of the state’s decreasing prison population, New York will expedite the closure of up to five state prisons. The governor will decide which jails to close by March of next year. The state’s corrections administration reports that since 2011, the state has closed two dozen prisons due to vacant beds, saving approximately $442 million a year.

The budget also included provisions to allow movie theaters to sell hard liquor, extend the pandemic-era sale of to-go alcoholic drinks, and allow New York City to lower its speed limits. These measures would also provide paid time off during pregnancy.

The state office responsible for drafting laws for the Legislature was affected by a cyberattack, which delayed the budget’s finalization by almost three weeks from its planned deadline of April 1st.

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