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đŸ€ S&P 500 Crushes 2024

+ 2025: A Year of AI, Utilities, And Crypto

December 31, 2024

Good afternoon! The US Treasury got a wake-up call after China-based hackers waltzed past its defenses, thanks to a compromised key from BeyondTrust’s remote management software. The breach allowed access to employee workstations and some unclassified documents, leaving officials scrambling to assure everyone the threat is under control. Treasury insists the hack is contained, but it’s another black eye in the ongoing saga of cyber vulnerabilities.

BeyondTrust claims it revoked the compromised API key as soon as it noticed the breach earlier this month, but the damage was already done. The Treasury is teaming up with the FBI and CISA to shore up defenses, but the incident highlights the risks of outsourcing critical systems. With state-sponsored attacks on the rise, the stakes for securing sensitive government data have never been higher.

MARKETS

*Stock data as of market close*

  • Markets closed the book on 2024 with a whimper, as the S&P 500 dipped 0.4%, the Nasdaq slipped 0.9%, and the Dow barely budged, down 0.07%. But don’t let today’s sluggish finish fool you—this year was a showstopper. The S&P rallied over 23%, and the Nasdaq rocketed nearly 29%, powered by Big Tech and AI-fueled optimism.

  • Gold shone bright, climbing 28%, while oil eked out a modest 0.2% gain. But Bitcoin took the crown, surging 111% in 2024, reminding everyone why it’s still the crypto king. A fitting end to a year where markets kept us on our toes.

STOCKS
Winners & Losers

What’s up 📈

  • FTAI Aviation rose 13.86% on fiscal 2025 guidance, with EBITDA estimates beating Wall Street expectations. ($FTAI)

  • Zivo Bioscience added nearly 13.16% after major investor Mark Strome bought 75,000 shares. ($ZIVO)

  • Nutriband jumped 12.68% after announcing an expedited review for its abuse-deterrent opioid patch, aiming for approval by late 2025. ($NTRB)

  • Biohaven gained 4.39% after director John Childs purchased 29,000 shares, increasing his stake to 6.5 million. ($BHVN)

  • Intel rose 1.2% but remains down 60% for 2024, marking its worst year on record. ($INTC)

What’s down 📉

  • Sangamo Therapeutics tumbled 56.41% as Pfizer ended its license for a gene therapy project. ($SGMO)

  • Tesla slid 3.25% as concerns over higher rates weighed on demand ahead of Thursday’s delivery report. ($TSLA)

  • Nvidia dropped 2.33%, with traders taking profits as the year wraps up. ($NVDA)

YTD
S&P 500 Crushes 2024

The S&P 500 wrapped up a 24% gain this year, riding high on an AI-fueled rally and resilient economic performance. That marks its best two-year run since the late ‘90s. But with interest rates staying sticky and stock valuations looking lofty, 2025 might not offer the same fireworks.

The Magnificent Seven—tech giants like Nvidia, Apple, and Microsoft—did much of the heavy lifting, contributing over half of the index’s gains. Meanwhile, financials and industrials showed some love, proving this year wasn’t all about tech.

Winners and Losers

This year brought some clear standouts (and faceplants) across the board:

  • The Big Winners:

    • Palantir (+356%): The AI darling scored big on government contracts and made its Nasdaq 100 debut.

    • Vistra (+262%): Nuclear power fueled the company’s impressive run as it capitalized on AI data center demand.

    • Nvidia (+178%): Kingvidia kept proving why it’s the go-to for AI chips, smashing earnings and surpassing $3 trillion in market cap.

  • Under the Radar:

    • GeneDX (+2,811%): The biotech firm saw a jaw-dropping surge, despite still chasing profitability.

    • Applovin (+735%): This mobile gaming and ad-tech company skyrocketed, crossing $100 billion in market value.

But not everyone had a banner year—stocks like Intel and Disney struggled as they tried to shake off operational challenges.

Looking Ahead

2025 might feel a little different. Here’s why:

  • Valuation Pressure: The S&P 500 trades at 21.9x forward earnings—well above its 10-year average. That’s a lot of faith in companies to deliver stellar results.

  • Earnings Growth Expectations: Wall Street is betting on 15% growth, up from 9.5% in 2024. Big shoes to fill, especially for companies stretched by inflation and cautious consumer spending.

Still, analysts see room for small caps to shine. The Russell 2000, down nearly 9% from its 2021 high, might benefit from lower borrowing costs as the Fed continues cutting rates.

What’s the Call?

Wall Street forecasts the S&P 500 will close 2025 near 6,678. Some expect a steady climb (Oppenheimer: 7,100), while others see a more cautious trajectory (UBS: 6,400).

But let’s be real: No one predicted two years of 20%-plus gains. So, while 2025 might demand more patience, the bulls aren’t ready to pack it up just yet.

NEWS
Market Movements

NEXT YEAR
2025: A Year of AI, Utilities, And Crypto

As we step into 2025, three themes are already making waves in the markets: the ongoing AI revolution, utilities adapting to the future of energy, and the ever-volatile crypto world. Let’s break down why these sectors are set to dominate the headlines and portfolios this year.

AI

The AI boom isn’t just a flash in the pan—it’s becoming a foundational force across industries. Generative AI tools are finally hitting mainstream adoption, with massive investments in infrastructure and ever-more powerful chips paving the way.

  • Nvidia remains the undisputed leader, but new players are emerging as the AI ecosystem diversifies.

  • Expect AI’s influence to extend beyond big tech into sectors like healthcare, finance, and even entertainment.

BlackRock predicts that the "AI flywheel" is just starting to spin, and 2025 could be the year it powers real-world applications, turning the hype into tangible economic impact.

Utilities — Powering the AI Era

As AI grows, so does the demand for energy. Big tech’s sprawling data centers are guzzling electricity at unprecedented rates, forcing a transformation in the utilities sector.

  • Microsoft’s nuclear revival at Three Mile Island was just the beginning. Expect to see more investments in alternative and renewable energy sources to keep up with AI’s needs.

  • Grid infrastructure is also getting a tech upgrade, with companies racing to modernize and meet surging demand.

Utilities, often overlooked, are now becoming an exciting growth story, with UBS and Goldman Sachs both recommending overweighting the sector for 2025.

Financials and Crypto

Donald Trump’s return to the White House has sparked a new era of deregulation, giving banks and financial services firms a major boost. Reduced compliance costs and pro-business policies are expected to free up capital and fuel growth across the industry.

But the real twist? The lines between traditional finance and crypto are blurring. Institutional adoption of crypto is accelerating, with major banks now offering bitcoin custody and blockchain-based financial services to high-net-worth clients.

  • Bitcoin’s resurgence—vaulting past $100,000 in 2024—has put crypto firmly back on the map.

  • Blockchain applications, from smart contracts to supply chain tracking, are starting to show their real-world potential.

Together, financials and crypto represent a powerful combination of stability and innovation, making them a standout play for 2025.

Zooming Out

AI, utilities, and financials aren’t just sectors—they’re the engines driving 2025’s economy. Whether it’s through technological innovation, energy transformation, or policy shifts, these themes are reshaping the market landscape.

For investors, the challenge isn’t finding opportunities—it’s deciding which ones to seize. After all, 2025 is shaping up to be anything but predictable.

NEWS
The Daily Rundown

Year In Review

RESOURCES
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