December 2024 Market Watch

December 4, 2024

Market Health Indicator - Current Score

The Market Health Indicator (MHI) measures market health on a scale of 0 - 100, analyzing various market segments such as economics, technicals, and volatility. Higher scores indicate healthier market conditions.

Investors had plenty to be thankful for in November

Markets rebounded sharply following a bumpy month of October, with the presidential election now in the rearview mirror. Volatility dipped to its lowest level since mid-July as the uncertainty surrounding the event dissipated. As investors turned attention back to the Fed, economic data seemed to support one more rate cut in 2024, further supporting sentiment.

Small-cap stocks led the way higher, with the CRSP US Small Cap Index soaring 10.50% for the month. Larger indices followed the momentum higher, with the Dow Jones Industrial Average, S&P 500, and Nasdaq 100 posting gains of 7.74%, 5.87%, and 5.31% respectively. Growth slightly outperformed value as a style, while all major sectors ended the month in positive territory.

Markets overseas didn’t bode quite as well as the US. Developed international stocks finished with a slight gain of 0.40%, while emerging markets fell 2.15%. Concerns about US trade policy, combined with ongoing economic weakness, created more of a headwind for stocks abroad. Despite the recent stimulus measures over the past few months, China has continued to face sluggish growth in its attempt to spur more activity.

Shortly after the presidential election concluded, the Fed announced its second rate cut of the cycle, dropping the target interest rate by another 25 basis points. While rates remained somewhat volatile throughout the month, the 10-year Treasury yield eventually settled lower falling from 4.28% to 4.18%, leading to a 1.06% gain for aggregate US bonds. This marked the sixth time in the past seven months in which bonds have experienced an increase.

While the positive response in markets seems clear with the benefit of hindsight, there was a general sense of anxiety leading up to the election. Many people felt this time was different than any other in the past, and not without reason. However, this highlights exactly why having a plan and investment strategy in place is so important. It can be easy to let our gut feelings and emotions drive our decisions when things don’t feel normal. Having predetermined rules in place can help cut through any near-term uncertainties, allowing us to focus on our longer-term goals.

Whoopsie-Macy’s

Famous for its namesake Thanksgiving Day Parade, Macy’s received some additional unwanted attention around the holidays.

The company was forced to delay its third-quarter earnings results after discovering a single employee covered up between $132 to $154 million of delivery expenses.

What exactly happened? A former employee working in the “small package delivery expense accounting” department intentionally made fake entries to hide expenses. This occurred over a three-year period and accounts for approximately 3% of total delivery expenses over that time.

While there’s never a convenient time for a large accounting error, the struggling retailer is in the midst of a massive overhaul. Macy’s is closing 150 of its locations by 2027 while heavily reinvesting back into the remaining 350 stores, so every penny counts.

This grandma doesn’t need help fixing her phone…

British phone company Virgin Media recently launched an AI-generated grandma named Daisy.

However, Daisy wasn’t created to bake sweets or treat her grandchildren like a personal tech support. Her sole purpose is to talk to scammers all day long, waisting their time so they don’t reach as many real people.

It’s estimated over $1 trillion was stolen via phone scams last year, and the elderly are frequently targeted by scammers, so Virgin Media sought to create the perfect victim.

The AI chatbot uses a realistic voice, trained on hours of recorded conversations from one of the creator’s real-life grandmas.

The early results? In just over a week, she spoke with 1,000 scammers, holding a conversation for over 40 minutes in one instance.

Fun Facts

• Warren Buffett’s Berkshire Hathaway has more than $325 billion in cash, larger than the market cap of all but 23 US companies.

• The number of possible unique chess games is greater than the number of atoms in the observable universe (10^120 compared to 10^80).

• The words scraunched and strengthed are the longest English words that are only one syllable long.

• In many watch advertisements, the time displayed is 10:10, because it’s considered the most aesthetically pleasing position for the hands.