The stock market rally had a strong, holiday-shortened week, with the Nasdaq leading the march back toward record highs. The S&P 500 also is close, but the Dow Jones is still below its 50-day. Treasury yields keep running higher. Tesla had a solid gain this past week, along with many leading stocks.
Stock Market Rebounds Even As Yields Keep Running
The major indexes rebounded from the prior week's sell-off, with the Nasdaq leading and nearing recent record highs. The S&P 500 bounced off its 50-day line. But the Dow Jones and Russell 2000 are still below their 50-day lines. The 10-year Treasury yield rose to the highest levels since May, a growing headwind for stocks.
Economic Data Mixed
Durable goods orders were weaker than expected in November, though core capital goods topped views. November new-home sales rose solidly, as expected, while consumer confidence took a surprise decline. Jobless claims remain low. Initial jobless claims are still running low, but continuing jobless claims hit their highest levels in more than three years.
Holiday Spending Solid
Meanwhile, U.S. retail sales excluding auto rose 3.8% in Nov. 1-Dec. 24 vs. a year earlier, according to Mastercard SpendingPulse. Some 10% of holiday spending came in the last five days. Online shopping grew 6.7% vs. 2.9% for in-person shopping. Apparel sales climbed 3.6% and electronics sales advanced 3.7%. Restaurant spending popped 6.3%. jumped 3.7 percent. That data are not adjusted for inflation.
Tesla Rebounds With Deliveries Due
Tesla rebounded after a slight retreat last week with fourth-quarter deliveries due on Jan. 2. Data out of China suggests continued strength there, perhaps offsetting a weak Europe and the U.S. The company is targeting unit delivery growth compared to 2023, which requires a record setting fourth quarter. However, Barclays analysts speculated this week that if Tesla misses this goal "would likely do little to dampen" TSLA's recent rally, fueled by President-elect Donald Trump, autonomous vehicle and artificial intelligence. The firm noted that if Tesla is successful in hitting a delivery record, it will "keep stock's narrative momentum strong." Heading into 2025, Tesla stock has been on a 70% tear, dating back to Trump's election win on Nov. 5, and some consolidation would be constructive. However, Barclays analysts on Dec. 18 warned that the postelection rally in TSLA shares reflects a "sharp disconnect" between the stock and the company's fundamentals. The firm wrote that Tesla shares are now best compared to cryptocurrencies.
News In Brief
Toyota Motor plans to double its return on equity to 20%, Nikkei newspaper reported, citing an unidentified Toyota executive, who added that the auto giant has no explicit target deadlines. Shares jumped, but are down sharply since March.
Uber Technologies rose slightly for the week after Taiwanese regulators blocked the company's planned $950 million acquisition of Delivery Hero's Foodpanda business.
Alibaba reportedly is forming a 50-50 joint venture with South Korea-based E-Mart's e-commerce platform Gmarket, Bloomberg reported.
OpenAI said it is moving toward a for-profit structure in 2025, removing some restrictions stemming from its nonprofit status. The huge artificial intelligence startup, backed by Microsoft, will need "more capital than we imagined."
