Your Weekly Update for Monday, January 6, 2025.
Beacon Rock Wealth Advisors is a dba of BR Capital, Inc. is a financial planning and registered investment advisory firm in Camas, Washington. We are always available to answer your finance questions. Give us a call at (360) 735-1900 or send an email.
If you or someone you know is worried about retirement, send us an email or give us a call for a no-obligation Retirement and Social Security Analysis.
If this information is helpful to you, please forward this to a friend and ask them to subscribe at https://newsletters.beaconrwa.com/subscribe.
Have a great week!
Mike Elerath
CERTIFIED FINANCIAL PLANNERTM
CERTIFIED IN LONG-TERM CARE
[email protected]
Bill Roller
NMLS #107972
CHARTERED FINANCIAL ANALYST
CERTIFIED FINANCIAL PLANNERTM
CHARTERED MARKET TECHNICIAN
[email protected]
For more information about Beacon Rock Wealth Advisors, check out our brochure here: https://beaconrwa.com/beaconrockbrochure/
Click on the image below to go to https://youtu.be/OSA11x0Qvq8 to see the video from January 3 in which Mike Elerath, Bill Roller, and Keller Williams Realtor Michael Harding discuss the financial markets and Clark County real estate.
Please give the video a “Like” and check out other videos and subscribe to the channel at https://www.youtube.com/@beaconrwa.
Summary
Markets were DOWN slightly last week. The Dow Jones Industrial Average was DOWN 0.60% to 42,732.13 while the S&P500 ended DOWN 0.48% to 5,942.47. The Nasdaq Composite FELL 0.51% to 19,621.68. The annual yield on the 30-year Treasury FELL 0.3 basis point(s) to 4.814%.
In a New Year holiday-abbreviated week, economic data included an improved (but still contractionary) ISM manufacturing report, minimally-changed construction spending, and continued movement higher for residential home prices.
Equities fell globally last week, in contrast to a positive year (to say the least, in the U.S.). Bonds gained a bit as interest rates settled from recent volatility. Commodities gained along with rising prices for crude oil and gold.
Economic Notes
(0/-) The ISM manufacturing index rose by 0.9 of a point to 49.3 in December, above the expected slight decline to 48.2. This remained in contraction but inched a bit closer to the 50 ‘neutral’ level. Under the hood, new orders rose by 2 points further into expansion at over 52, along with a 4 point increase for production back to just above neutral, while employment fell by nearly -3 points further into contraction. Prices paid also rose by another 2 points back into solid expansion. In a separate release, the final December S&P Global US manufacturing PMI report was revised up by 1.1 points to 49.4. These reports continued to show a lack of upward movement in the manufacturing sector, as they have for much of the past two years, but to an improved degree recently, at least appearing a bit more balanced towards the neutral level. Seasonal effects could also have played a role, as anecdotal commentary from survey participants into the new year still hints at weakness.
(0/-) Construction spending was unchanged in November, in contrast to the 0.3% increase expected. Public residential spending rose by nearly 2%, followed by private residential spending by a tenth, which offset non-residential spending. Construction costs also fell by -0.1% for the month, which translated into a 0.1% real rise in spending.
(0/+) The S&P Case-Shiller 20-city home price index rose 0.3% in October on a seasonally-adjusted basis, a tenth higher than expected. Year-over-year, the index rose 4.2%, a deceleration of -0.4% from the prior month. By city, New York, Chicago, and Las Vegas saw the strongest gains of 5-7%, while prices in Tampa were just positive by a few tenths of a percent over the past year.
(0/+) The FHFA house price index for October saw an increase of 0.4%, a tenth below expectations, and a few tenths below the prior month’s pace. Year-over-year, house prices were up 4.5%, with the largest gains in the Middle Atlantic (NY/NJ/PA) and East North Central (Great Lakes states) regions, upwards of 7%, while the West South Central (OK/AR/TX/LA) and Pacific lagged with gains of over 2%. These indexes continue to show upward progress, albeit at a slower rate than in recent years after the spike during the pandemic. Going into 2025, housing affordability obviously remains a nationwide problem, exacerbated along the two coasts. On one end, the Fed’s easing has not alleviated any pressures, as mortgage rates have stayed high (along with the 10-year U.S. Treasury yield, which has risen over the past quarter). In addition, weak homebuilding activity (or existing homeowners interested in selling) has kept new supply at bay, that could help alleviate some of these pressures. Some of this is related to restrictive zoning, which tends to be a locally-controlled domain rather than national, so it’s difficult to see any easy fixes on the horizon.
(-) Initial jobless claims for the Dec. 28 ending week fell by -9k to 211k, below the 221k median forecast. Continuing claims for the Dec. 21 week fell by a substantial -52k to 1.844 mil., below the expected smaller decline to 1.890 mil. Being the holidays, seasonal factors and adjustments can skew some of these numbers back and forth more dramatically than at other times of the year, so should be taken with more of a grain of salt than usual.
Market Notes
| Period ending 1/3/2025 | 1 Week % | 2024 % | 2025 YTD % |
| DJIA | -0.59 | 14.99 | 0.46 |
| S&P 500 | -0.45 | 25.02 | 1.05 |
| NASDAQ | -0.49 | 29.57 | 1.62 |
| Russell 2000 | 1.13 | 11.54 | 1.72 |
| MSCI-EAFE | -0.88 | 3.82 | -0.30 |
| MSCI-EM | -0.82 | 7.50 | -0.14 |
| Bloomberg U.S. Aggregate | 0.18 | 1.25 | -0.13 |
| U.S. Treasury Yields | 3 Mo. | 2 Yr. | 5 Yr. | 10 Yr. | 30 Yr. |
| 12/31/2023 | 5.40 | 4.23 | 3.84 | 3.88 | 4.03 |
| 12/27/2024 | 4.31 | 4.31 | 4.45 | 4.62 | 4.82 |
| 12/31/2024 | 4.37 | 4.25 | 4.38 | 4.58 | 4.78 |
| 1/3/2025 | 4.34 | 4.28 | 4.41 | 4.60 | 4.82 |
U.S. stocks finished 2024 strongly, with the S&P up over 25%, representing the second straight year of gains of 20%+. Though, the full short week ended negatively, with what appeared to be some profit-taking, late seasonal adjustments, and a downgrade of Q4 U.S. economic growth as measured by the Atlanta Fed GDPNow (down from 3.1% to 2.6%). Small caps, on the other hand, had a solidly positive week. In the S&P 500 by sector, energy led with gains of over 3%, followed by utilities. The largest declines were experienced by materials, consumer discretionary (primarily volatility with Tesla), and consumer staples, each down at least a percent.
Some investors nervously await the outcome of various forms of the ‘January effect,’ whether it be the stock market performance for the entire month, or only the first 5 or 10 days. Obviously, this sample is too short to get a handle on 2025’s fundamentals and likely surprises to come, but from a behavioral standpoint, it can begin to set a tone for market sentiment.
Foreign stocks were down as well, with flattish results in the U.K. tempering sharper declines in Europe and Japan, as well as emerging markets. These were not helped by an approximate one percent rise in the value of the U.S. dollar for the week. Higher inflation, notably in Spain, led to hawkish rhetoric and chances of fewer than expected ECB rate cuts over the coming year. Chinese stocks were led downward by weaker manufacturing data, which came in just above the neutral 50 level and continues to frustrate investors looking for a growth catalyst.
Bonds fared positively for the week, as interest rates fell back a bit. High yield and floating rate bank loans outperformed government bonds slightly, while unhedged foreign bonds were held back by a stronger U.S. dollar last week.
Commodities rose as a whole, led by gains in energy and precious metals, offsetting declines in industrial metals. Crude oil prices rose nearly 5% last week to $74/barrel, with hopes for higher demand this coming year were coupled with concerns over increased sanctions on Iran, which would reduce market inventories.
Mortgage Rates
“Inching up to just shy of seven percent, mortgage rates reached their highest point in nearly six months,” said Sam Khater, Freddie Mac’s Chief Economist. “Compared to this time last year, rates are elevated and the market’s affordability headwinds persist. However, buyers appear to be more inclined to get off the sidelines as pending home sales rise.”
The 30-year FRM averaged 6.91 percent as of January 2, 2025, up from last week when it averaged 6.85 percent. A year ago at this time, the 30-year FRM averaged 6.62 percent.
The 15-year FRM averaged 6.13 percent, up from last week when it averaged 6.0 percent. A year ago at this time, the 15-year FRM averaged 5.89 percent.
Freddie Mac’s Primary Mortgage Market Survey® is focused on conventional, conforming, fully amortizing home purchase loans for borrowers who put 20% down and have excellent credit. Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Borrowers may still pay closing costs which are not included in the survey.
Through our relationship with Mortgage Window, Inc. (NMLS#2485156) in Vancouver, Washington we originate residential and reverse mortgages.
Selected Cryptocurrencies
| Symbol | Name | Price | 24h % | 7d % | Market Cap | Volume(24h) |
| BTC | Bitcoin | $99,466.30 | 1.77% | 7.41% | $1,970,081,844,358 | $31,668,698,302 |
| ETH | Ethereum | $3,650.66 | 0.93% | 9.27% | $439,807,022,663 | $17,346,740,979 |
| XRP | XRP | $2.40 | 1.09% | 17.93% | $137,552,014,523 | $3,683,241,690 |
| SOL | Solana | $218.61 | 2.70% | 15.52% | $105,585,506,904 | $2,589,350,577 |
| BNB | BNB | $716.90 | 1.26% | 3.77% | $103,238,407,205 | $1,609,382,144 |
| DOGE | Dogecoin | $0.39 | 1.02% | 22.70% | $56,813,037,021 | $2,539,536,794 |
| USDC | USDC | $1.00 | 0.01% | 0.02% | $45,658,974,826 | $5,231,620,406 |
| ADA | Cardano | $1.07 | -1.77% | 26.46% | $37,739,422,514 | $1,162,895,072 |
| TRX | TRON | $0.27 | 0.87% | 4.62% | $22,905,855,830 | $730,672,386 |
| AVAX | Avalanche | $43.96 | 5.14% | 23.00% | $18,034,252,937 | $552,161,571 |
| SUI | Sui | $5.21 | 0.36% | 29.63% | $15,666,777,267 | $1,177,274,122 |
| LINK | Chainlink | $23.95 | 3.42% | 17.04% | $15,280,042,701 | $667,854,600 |
| TON | Toncoin | $5.70 | 0.12% | 3.68% | $14,487,586,509 | $147,811,134 |
| SHIB | Shiba Inu | $0.00 | 1.42% | 14.41% | $14,215,615,459 | $418,713,922 |
| XLM | Stellar | $0.45 | 2.40% | 37.04% | $13,669,955,991 | $509,849,284 |
| DOT | Polkadot | $7.70 | 1.70% | 16.12% | $11,833,890,584 | $283,313,332 |
| HBAR | Hedera | $0.31 | 1.39% | 12.76% | $11,685,374,245 | $512,333,338 |
| BCH | Bitcoin Cash | $472.00 | 0.75% | 7.48% | $9,351,223,197 | $290,974,457 |
| UNI | Uniswap | $15.01 | 0.08% | 15.52% | $9,015,045,679 | $507,289,472 |
Information current as of 6:00 AM PST, Monday, January 6, 2025. Source: https://coinmarketcap.com
Check us out at https://beaconrwa.com and our affiliated website at https://reverse-mortgages.us.
Sources: Ryan Long, CFA, FocusPoint Solutions, American Association for Individual Investors (AAII), Associated Press, Barclays Capital, Bloomberg, Citigroup, Deutsche Bank, FactSet, Financial Times, Goldman Sachs, JPMorgan Asset Management,
MarketfieldAsset Management, Morgan Stanley, MSCI, Morningstar, Northern Trust, Oppenheimer Funds, PIMCO, Standard & Poor’s, StockCharts.com, The Conference Board, Thomson Reuters, T. Rowe Price, U.S. Bureau of Economic Analysis, U.S. Federal Reserve, Wall Street Journal, The Washington Post. Index performance is shown as total return, which includes dividends, with the exception of MSCI-EM, which is quoted as price return/excluding dividends. Performance for the MSCI-EAFE and MSCI-EM indexes is quoted in U.S. Dollar investor terms.
The information above has been obtained from sources considered reliable, but no representation is made as to its completeness, accuracy or timeliness. All information and opinions expressed are subject to change without notice. Information provided in this report is not intended to be, and should not be construed as, investment, legal or tax advice; and does not constitute an offer, or a solicitation of any offer, to buy or sell any security, investment or other product. FocusPoint Solutions, Inc. is a registered investment advisor.
Notes key: (+) positive/encouraging development, (0) neutral/inconclusive/no net effect, (-) negative/discouraging development.