Markets Daily: Stock targets topple

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Markets Snapshot S&P 500 Futures 6,013.25 -0.23% Nasdaq 1000 Futures 21,651.25 -0.22% US 10-Year Treasury Yield 4.599% -0.028 Bitcoin 93,476.69 +0.29% Stoxx Europe 600 Index 506.21 -0.19% Market data as of 06:04 am EST. View or Create your Watchlist Market data may be delayed depending on provider agreements.

Five things you need to know

US equity futures edged lower as investors trimmed positions amid uncertainty heading into year-end. The S&P 500 and Nasdaq 100 both slid more than 1% at the end of last week with tech megacaps bearing the brunt Jimmy Carter, the 39th US President, has died at the age of 100 and President Joe Biden has designated Jan. 9 as a national day of mourning. The US stock market has traditionally closed on the day of presidential funerals. No announcement has been made as of yet by exchange overseers Nissan shares headed for a two-day drop of 13% on concern the terms of the carmaker's planned deal with Honda would give investors a lower stake in the proposed joint holding company. The stock fell as much as 6.7% on Monday in Tokyo A Jeju Air jet suffered a landing-gear malfunction on Monday before returning safely to Seoul, the airline's second aircraft to experience the fault in two days. South Korean authorities said they would probe the latest incident, which comes a day after 179 people died in the country's worst civil-aviation disaster The Treasury market is close to vanquishing the small gains it has made so far in 2024 as bond investors head into another holiday-shortened trading week with few economic data releases or scheduled Federal Reserve speakers. US markets will be closed on Wednesday for the New Year's Day holiday Which assets will fare the best next year? Let us know and take the Markets Pulse survey.

Targets toppling

This time last year, the stock market's rally had blown past even the most optimistic targets and Wall Street forecasters were convinced it couldn't keep up the dizzying pace. So as strategists at Bank of America, Deutsche Bank, Goldman Sachs and other big firms sent out their calls for 2024, a consensus took shape: After surging more than 20% as artificial intelligence breakthroughs unleashed a tech-stock boom and the economy kept defying the doomsayers, the S&P 500 Index would likely scratch out only a modest gain. As the Federal Reserve shifted to cutting interest rates, Treasuries were seen as ripe to give equities a run for their money.  What followed, instead, delivered another humbling to Wall Street prognosticators who have been caught off guard by the market's twists and turns ever since the end of the pandemic. Rather than lose steam, equity prices continued to soar higher. By late January, the S&P 500 had already surpassed the average year-end target from strategists. It went on to hit one record high after another and is heading to a 25% gain in 2024, capping the strongest back-to-back annual runs since the dot-com bubble of the late 1990s.  "There is an element of miraculousness to it," said Julian Emanuel, chief equity and quantitative strategist at Evercore ISI, who by mid-year abandoned his call for a slight dip in the S&P 500 and was the first among major strategists to introduce a year-end target of 6,000. "Trends can go on longer and go farther than one could ever imagine." Still, a normally sleepy year-end session on Friday in the US saw the S&P 500 fall as much as 1.7% on no obvious news — underscoring risks to the one equity strategy that has worked reliably in 2024.  So-called momentum investing, or riding the market's winners, has rewarded its faithful handsomely — while also raising risk that blowups like Friday's will become more common. "Momentum is great until it's not, until something changes," said Melissa Brown, head of applied research at SimCorp. —  Alexandra Semenova,  Sagarika Jaisinghani and Justina Lee

On the move

Apple shares have rallied 33% this year, adding almost $870 billion in value, and propelling the iPhone maker's market capitalization to $3.9 trillion. The stock, which reclaimed the title of the most valuable company earlier this year, has fallen in just four sessions this month. Reaching a market cap of $4 trillion would mean it's worth more than the bottom 43% of the S&P 500 companies combined. Elsewhere, the Bitcoin rally sparked by Donald Trump's election victory in early November is stalling as 2024 draws to a close. The digital asset wavered at around $93,000 on Monday morning in London, about $15,000 below the record high set in mid-December. — Subrat Patnaik

Dollar strength

The dollar is headed for its best year in almost a decade as US economic strength reins in expectations for the Federal Reserve's rate-cutting cycle and Trump's threats of harsh tariffs underpin bullish bets on the currency.  The Bloomberg Dollar Spot Index rose more than 7% so far this year, the best run since 2015. All currencies in the developed world weakened against the greenback as other central banks had to support local economies.  "The main pillar of support for the US dollar this year has been the strength of the economy," said Skylar Montgomery Koning, a foreign-exchange strategist at Barclays. "That strength means the Fed is coalescing on a shallow cutting cycle that leaves rates in the US higher than elsewhere, helping sustain historically elevated dollar valuations." The dollar gauge touched the strongest level in over two years earlier this month when the Fed cut interest rates but signaled a slowdown in the pace of monetary easing. Still, as Wall Street bets the dollar has more room to rise in 2025, global economic growth may improve later in the year, supporting other currencies and weighing on the dollar.  In 2024 so far, the yen, Norwegian krone and New Zealand dollar were the worst performers in the Group of 10, with each falling more than 10% against the greenback as of Dec. 27. The euro has lost about 5.5% to trade near $1.04, with a growing number of strategists seeing the risk of the common currency reaching parity with the dollar next year.  — Anya Andrianova and Carter Johnson

What else we're reading

South Korea investigators seek arrest warrant for President Yoon Musk's growing influence erodes resistance to Starlink Gold's 27% advance stands out in mixed year for metals markets ECB's Knot says trade war could export China deflation to Europe Aliyev says Russia accidentally shot Azerbaijan Airlines jet China fights rumors of panda abuse at US Zoo in sign of goodwill

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