January Jitters – A Look at the Market’s First Week

A shaky start — what drove the dip, and what to watch ahead

Author

Market Mastery Digest
January 06, 2025

Opening Bell 2025 – The Market Awaits

Welcome to our first wrap-up of 2025!

The year didn’t kick off on a high note, with markets stumbling out of the gate and SPY ending the week on a cautious rebound.

Apple and Tesla both played major roles in the broader dip, and uncertainty surrounding upcoming economic data kept traders on edge.

As we head into the second week, let’s break down what happened and what lies ahead.

Despite expectations for a year-end boost from the Santa Claus rally, the market closed the holiday season with lackluster performance.

Historically, this rally has been seen as a sign of investor optimism heading into the new year, but it didn’t deliver in 2024-2025.

Concerns over persistent volatility and profit-taking from earlier gains have left traders wondering if this bumpy start will set the tone for the rest of the year.

Apple shares fell after UBS downgraded its iPhone sales forecast, citing weak demand in China.

With iPhones making up over 50% of Apple’s revenue, this development sent ripples through the tech sector.

Although Apple announced discounts to revive sales, uncertainty looms regarding its performance in international markets.

Tesla’s Q4 delivery numbers came in below expectations, marking its first-ever annual sales decline.

The miss triggered a 6% drop in its stock, adding pressure to an already jittery market.

Friday saw a broad rally that helped all three major U.S. stock indexes recover some of the week’s losses.

Megacap tech stocks, including Tesla and Nvidia, led the charge, putting the Nasdaq in front as the top-performing index of the day.

Despite lingering concerns about upcoming economic data and policy changes, the rebound provided a temporary sense of relief for investors.

U.S. stock markets will be closed on Thursday to honor the life and legacy of former President Jimmy Carter.

On Tuesday, the ISM Services PMI report will be closely followed to measure the health of the U.S. non-manufacturing sector.

The Federal Reserve will release the FOMC meeting minutes on Wednesday, providing insights into discussions from their last meeting, particularly around inflation and interest rates.

The December jobs report is set to be released on Friday, with analysts predicting around 150,000 new jobs and an unchanged unemployment rate of 4.2%.

Any surprises in the data could impact expectations for the Fed’s next moves.

The markets have started the year on a shaky footing, driven by concerns over tech performance, missed expectations from key players, and fading hopes of a Santa Claus rally.

As we head into a data-heavy week, stay tuned for more updates, insights, and strategies in the next issue.

Until then, stay sharp and trade smart!