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- 🗓️ Last Full Market Week of 2024
Welcome to your new week.
Maybe we should rephrase that….
Welcome to the last full work week of the year!
To all of my fellow Bitcoin holders — cheers!
As a quick note for our scheduling — we plan on doing one more Week in Review and Investing Week Ahead post this year. They may be a bit more abbreviated than our typical newsletters, but you can expect those on Sunday the 22nd and Monday the 23rd.
Let’s dive into everything you need to know this week.
🎥 Finance + Thrills = 🎁 Free Movie Night!
Calling all Canadian GRIT Subscribers! The first 20 to reply with their favorite finance movie will snag 2 free tickets to BABYGIRL courtesy of Elevation Pictures — a steamy thriller starring Nicole Kidman as a high-powered CEO in a forbidden affair.
You can click here to watch the trailer on YouTube.
📅 It hits theaters across Canada on December 25th.
Don't wait — reply now and claim your free tickets! 🍿✨
Key Earnings Announcements:
Accenture, CarMax, Carnival, Cintas, Darden Restaurants, FedEx, Micron, Nike, and more.
Monday (12/16): Red Cat Holdings
Tuesday (12/17): Heico
Wednesday (12/18): ABM, Birkenstock, General Mills, Jabil, Micron, Toro
Thursday (12/19): Accenture, Blackberry, Carmax, Cintas, Darden Restaurants, FedEx, Nike
Friday (12/20): Carnival Cruises, Winnebago
What We’re Watching:
Micron Technologies (MU)
Source: Micron Investor Relations
Micron Technology (+24% YTD) reports earnings on Wednesday, expected to post EPS of $1.56 on $8.71B of revenue. Analysts will focus on its HBM3E ramp and record data center contributions, which now account for 35% of revenue — up from 25% last year.
Wells Fargo projects Micron capturing over 20% of the $25B high-bandwidth memory (HBM) market by 2025, with supply already sold out for the year. Momentum in AI-driven server demand and DDR5 adoption are also expected to fuel growth.
“Servers continuously need more memory, especially considering the enormous demand due to AI. Micron's revenues surged by a staggering 93% last quarter due to enormous AI server demand… should materialize into robust earnings this quarter.”
Micron Technology, Inc. (MU) Stock Performance, 5-Year Chart, Seeking Alpha
Nike (NKE)
Source: Nike Investor Relations
Nike (-29% YTD) will release its fiscal Q2 earnings on Thursday. Investors are closely watching new CEO Elliott Hill's initial moves since his return in October, as his leadership is seen as critical to turning the company around.
While the worst of Nike's margin pressures may be behind it, analysts caution that a full recovery could take years, with revised EPS estimates for 2025-2027 reflecting a slower rebound. Barclays recently lowered its price target to $79, citing the need for sustained transformation efforts.
Nike has now declined more than -50% since its peak in 2021, it will be interesting to see if the company will be able to make a turnaround.
Nike, Inc. (NKE) Stock Performance, 5-Year Chart, Seeking Alpha
Investor Events / Global Affairs:
Palo Alto’s stock split, the next “Triple Witching Day,” and the U.S. government faces yet another funding deadline.
Palo Alto Networks (PANW) 2-for-1 Stock Split
Sources: David Paul Morris / Bloomberg / Getty Images / Fast Company
Palo Alto Networks (+33% YTD) will begin trading at its split-adjusted price after completing a 2-for-1 stock split — its first since 2022. This comes alongside strong Q1 FY2025 earnings and improved operating margins; however, billings saw an unexpected decline, management emphasized that this metric no longer reflects the company’s performance and reaffirmed their free cash flow and long-term growth outlook.
Palo Alto Networks (PANW) Stock Performance, 5-Year Chart, Seeking Alpha
Palo Alto Networks did not give an explicit reason why it was splitting its shares. Assumptions are that they’re following the norm of companies that want to make their shares more “accessible” to the masses and potentially appealing with a lower price.
They are joining Chipotle (CMG), Nvidia (NVDA), Walmart (WMT), and others giants that have had a stock split this year.
If you’re a holder of PANW — don’t freak out! Your shares did not get cut in half overnight.
Triple Witching Day
Sources: Michael Nagle | Bloomberg | Getty Images
The stock market may experience increased volatility this Friday — but don’t worry.
“Triple Witching Days” occur on the third Friday of March, June, September, and December, when three types of derivatives — stock options, index futures, and index options — all expire simultaneously. This event often triggers heightened market volatility as traders rush to settle or roll their positions, especially during the final trading hour, known as the “witching hour.”
Historically associated with sharp price swings, triple witching has become less dramatic in recent years due to staggered derivative expirations. While these days may lead to short-term stock market weakness, the long-term impact is minimal for buy-and-hold investors. However, active traders may find opportunities in the volatility. For all market participants, staying mindful of these dates can help navigate potential risks and opportunities.
Source: Barchart
We’ll see if potentially increased volatility can do anything to slow down the insane inflow into U.S. ETFs and mutual funds. It’s been $186 Billion over the last 9 weeks, the largest inflow in history!
“In recent years, triple witching days have tended to be less dramatic in terms of volatility. That partly reflects a vastly larger pool of option contracts and other derivatives that have staggered expirations or expire on a weekly or even a daily basis. Expiration dates are now scattered across the calendar, rather than happening on just a handful of days every year.”
U.S. Government Funding Deadline
Source: Michael Dell
The U.S. government faces a funding deadline on Friday, December 20 — with Congress likely to pass a continuing resolution to extend funding into early 2025.
This would avoid a government shutdown and give the new administration and Congress control over fiscal decisions. Meanwhile, the debt ceiling looms on January 1 — requiring action to prevent a default which would have large economic consequences.
“There are a lot of things I would prefer. But realistically, we’re not going to put together a budget between now and Christmas. It’s not going to happen. I expect us to have a continuing resolution (CR) probably through the middle of March. I expect that CR to be pretty thin."
Major Economic Events:
The Fed’s final rate decision of 2024 seems to be locked in, and we’ll receive retail sales updates.
Monday (12/16): Empire State Manufacturing Survey, S&P Flash U.S. Manufacturing PMI, S&P Flash U.S. Services PMI
Tuesday (12/17): Capacity Utilization, Home Builder Confidence Survey, Industrial Production, Retail Sales Minus Autos, U.S. Retail Sales
Wednesday (12/18): Building Permits, Fed Chair Powell Press Conference, FOMC Interest Rate Decision, Housing Starts
Thursday (12/19): Existing Home Sales, GDP (second revision), Initial Jobless Claims, Philly Fed Manufacturing Survey, U.S. Leading Economic Indicators
Friday (12/20): Consumer Sentiment, Core PCE, PCE, Personal Income, Personal Spending
What We’re Watching:
Fed Interest Rate Decision
Source: CME FedWatch Tool
The Federal Reserve is expected to cut interest rates to 4.25%-4.5% on December 18th. Fixed income markets and recent Fed speeches have led to a +95% chance of a cut according to CME FedWatch Tool and Kalshi Prediction Markets.
Upcoming jobs and inflation data could influence the decision, but cooling inflation and a softening job market make a cut likely.
"We think that the economic forecasts will show better growth and firmer inflation this year and that the median interest rate forecast dots will be revised to show three cuts next year instead of four, as in the September dots.”
U.S. Retail Sales
Retail sales in the US increased +0.4% M/M in October 2024 — following an upwardly revised +0.8% gain in September, and above market forecasts of +0.3%.
Economists expect a gain of +0.6% for November — with Black Friday shopping baked into the equation.
"Online retail spending was particularly strong around the Thanksgiving period. In fact, holiday spending is running ahead of cumulative 2023 levels despite a delayed Thanksgiving. Hence, we expect a robust retail sales report for Nov, with retail sales ex-autos and the core control category coming in at +0.5% M/M."
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