That's a Wrap on 2024: From Tech's Triumph to Mining's Misery

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Welcome to Equity Espresso’s Market Recap.

The Australian market concluded 2024 with a 7.5% annual gain, falling short of 2023's 7.8% increase after the S&P/ASX 200 index dropped 0.9% to 8,159.10 on the year’s final trading day. The decline was influenced by a tech selloff on Wall Street and disappointing Chinese factory data, with Real Estate (-1.71%), Consumer Discretionary (-1.35%), Telecommunication (-1.05%), and Financial (-1.04%) sectors leading the downturn.

Gold prices declined 0.6% to $2,604.49/oz in thin Monday trading, retreating from its record high of $2,790.15 set in October, with the commodity gaining nearly 27% in 2024. The market remains cautious ahead of key U.S. economic data next week and Trump's incoming policies. At the same time, persistent geopolitical tensions, central bank buying, and U.S. deficit concerns continue to support long-term safe-haven demand.

The year saw significant sector divergence, with technology stocks surging 49.5% and financials gaining 28.2%, driven by strong performance in US-exposed tech companies. Energy and Mining sectors faced substantial headwinds throughout 2024, with energy stocks declining 18.4% amid falling oil prices and geopolitical tensions. A fall in Iron Ore prices below US$100 per tonne resulted in significant losses for major players like BHP and Fortescue, which fell 21.8% and 37.4%, respectively. The Materials sector as a whole fell by 17.27%.

Wall Street

Major U.S. stock indexes closed lower in light trading volume on Monday, with the Dow Jones dropping 0.97%, the S&P 500 falling 1.07% and the Nasdaq declined 1.19%. All 11 major S&P 500 sectors were affected by the broad selloff, marking a negative session in what has otherwise been a year of strong double-digit gains for the markets.

The day's bearish sentiment was attributed to multiple factors, including end-of-year tax positioning, elevated valuations, rising Treasury yields, and uncertainty about market conditions in 2025. Additionally, President Biden announced that Thursday, January 9, will be observed as a national day of mourning following the passing of former President Jimmy Carter on Sunday.

Boeing (-2.31%) shares declined after South Korea ordered comprehensive inspections of domestic carriers' 737-800 fleet following a catastrophic Jeju Air accident that resulted in 179 fatalities. MicroStrategy (-8.19%) shares fell despite revealing it had acquired 2,138 Bitcoin at roughly $97,837 per coin between December 23 and 29, totalling $209 million.

S&P500 Sector Performance

Economic Data

• U.S. Pending Home Sales rose 2.2% month-over-month in November 2024, above forecasts of a 0.7% increase and following a downwardly revised 1.8% advance in October.

• The Chicago Business Barometer (PMI) dropped to 36.9 in December 2024, compared to November's 40.2 and missing market forecasts of 42.5.

• China's NBS Manufacturing PMI fell to 50.1 in December 2024, down from November’s seven-month high of 50.3 and was below market consensus of 50.3

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🌎️ Around The Globe

• Chinese toy manufacturer Bloks Group plans to raise up to HK$1.46 billion ($188.01 million) in a Hong Kong IPO, offering 24.1 million shares priced between HK$55.65 and HK$60.35. The offering represents 10% of company shares, with proceeds to expand production and development.

• OpenAI announced plans to restructure as a public benefit corporation with a nonprofit arm, aiming to balance capital needs with public interests. The $157B company's reorganisation follows its evolution from a nonprofit and last year's leadership turmoil.

• President-elect Trump has petitioned the Supreme Court to delay the January 19 TikTok ban deadline, which requires the app's Chinese parent company to sell or cease U.S. operations.

• Ukraine's leading mobile provider, Kyivstar, has partnered with Starlink to provide direct satellite-to-phone connectivity, launching messaging services in Q4 2025.

• The Tel Aviv Stock Exchange will shift from Sunday-Thursday to Monday-Friday trading beginning in 2026, with Finance Minister Bezalel Smotrich approving the change to align with global markets.

   

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*1-year, 3-year and 5-year returns are calculated as of November 30 2024.

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DISCLAIMER: Please note that the information provided in this newsletter is for educational purposes only and should not be considered financial advice. It is not intended to encourage you to buy/sell assets or make economic decisions. We strongly recommend conducting your research before making any investment.