To The Moon

The stock market started off the first trading day of 2025 on a positive note, the rise was due to buy-the-dip trading and rebalancing activities. But soon, we saw the stock market faced volatility during the first session of the year as major U.S. equities indexes reversed course in the afternoon to end the session lower.

Rising interest rates and losses in large-cap stocks caused a midday decline. Despite this volatility, the market closed above session lows with minimal losses.

The S&P 500 fell 0.2% after initial peak at 0.9% gain on Thursday, extending a streak of down days dating back to last week's return from the Christmas holiday. NASDAQ managed 1.1% intraday high before settling for a 0.2% decline. DJIA slipped 0.36% following this Wednesday's New Year's Day pause, Russell 2000: Outperformed, closing 0.1% higher.

Manufacturing Data Indicate Contraction

We have the initial jobless claims at 8.30am ET, which decreased by 9,000 to 211,000, indicating employer reluctance to lay off workers. Construction spending remain unchanged in November, with private construction up 0.1% and public construction down 0.1%.

Next, S&P Global US Manufacturing PMI: Final reading came in at 49.4, indicating contraction. MBA Mortgage Applications Index was down by 21.9% from two weeks ago, with refinance applications down 36% and purchase applications down 13%.

We will be expecting the December ISM Manufacturing Index which is expected at 48.5%. And also, EIA Natural Gas Inventories which the previous reading stands at -93 bcf.

Significant Stocks Performance - Apple, Tesla and Microsoft

$Apple(AAPL)$ suffered a 2.62% decline due to cautious comments on iPhone demand from UBS, even with the announcement of discounts on its current iPhone models in China did not help the share price. Apple aims to keep pace with domestic rivals in the key smartphone market. The tech giant also agreed to pay a $95 million cash settlement related to claims that its voice assistant Siri compromised users' privacy.

Fellow Mag 7 member, $Tesla Motors(TSLA)$ also ended 6.08% lower, this weakness was due to the first annual decline in deliveries as seen in its Q4 delivery report, losing the most of any S&P 500 stock as 2025 trading kicked off. Thursday's decline came after the carmaker reported lower-than-expected vehicle deliveries for the fourth quarter, logging a year-over-year drop in delivery figures. The annual slump suggests that demand and the economic environment could be weighing on the company. At the same time, Tesla also faces stiff competition in the electric vehicle (EV) market from China's BYD (BYDDY) and a number of other players.

Next, $Microsoft(MSFT)$ also declined by 0.69% with no specific catalyst.

S&P 500 Energy Sector Winner Above 1%

The S&P 500 Energy sector gained above 1% as we saw shares of Texas Pacific Land Corp. (TPL), an owner of significant acreage in the oil-rich Permian Basin, gained 6.7%. The stock saw significant volatility in the final months of 2024 surrounding its late-November addition to the S&P 500 and as the century-old land trust explores alternative revenue sources, including bitcoin mining, data centers, and alternative energy. WTI crude oil increased 1.9% to $73.11/bbl, and natural gas rose 1.6% to $3.15/mmbtu.

Consumer Discretionary was the worst performer down by 1.27% due to weak performance from Domino Pizza and Starbucks. Information Technology managed to lose only 0.20%, which was helped by First Solar and Enphase Energy.

Note Yield Ended With Losses

Treasuries ended with losses, affecting equity indices negatively. The 2-year yield rose to 4.262%, and the 10-year yield settled at 4.568%.

Stocks To Watch

The largest six stocks in the S&P 500, including Apple (AAPL), Amazon (AMZN), and Microsoft (MSFT), now account for 31.2% of the index's market cap, a significant increase from 11.2% in 2013. UBS noted that despite high returns, these stocks' valuations have not expanded as much as the broader market, with earnings contributing more to their growth in 2024.

Carvana (CVNA) shares experienced volatility following a negative report from Hindenburg Research, which disclosed a short position in the company. Carvana refuted the claims, labeling them as misleading and reiterated its focus on future growth. Analysts have mixed views on the stock, with Wall Street generally more optimistic.

$Cloudflare, Inc.(NET)$ saw a 4% rise after Goldman Sachs upgraded it to Buy, citing an expected 28% upside. The firm highlighted Cloudflare's improving sales strategy and new AI use cases as key growth drivers for 2025. Meanwhile, Check Point Software Technologies (CHKP) was downgraded to Neutral.

If we looked at NET, the MACD does give us a bearish outlook, and looks to continue, but if we looked at how NET have been trading above the short-term and long-term MA, it is showing that NET is exhibiting a positive upside, then we have MTF giving us a signal of strong upward trend.

This would mean that the current price might be a potential entry price as NET have show strength to go higher.

Lyft (LYFT) could become a strategic acquisition target for Amazon (AMZN) to enhance its autonomous vehicle ambitions. Analysts suggest that Lyft's extensive ride-hailing network would complement Amazon's existing capabilities and pose a competitive threat to Waymo.

Meta Platforms (META) announced Joel Kaplan as the new head of global policy, succeeding Nick Clegg. Kaplan's appointment is seen as a strategic move to navigate evolving societal and political expectations surrounding technology.

Apple (AAPL) shares dropped over 3% after UBS cut its estimates due to weak iPhone sales. Analyst David Vogt noted a significant year-over-year decline in iPhone sell-through, prompting a revision in revenue projections for the tech giant.

Summary

I am expecting the market to remain cautious as investors wait for the 20 Jan for the new Trump administration era, there might be some sectors which are still moving in an upside, but that might show some profit taking as well.

The labor data show that market is still trying to go strong, but I would watch out for some of the sectors rotation.

Appreciate if you could share your thoughts in the comment section whether you think market would continue to trade in a cautious mode.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.