Global Economic Daily - 12/18/2024

NEWS AND MARKET COMMENTARY

Global Equities

• Stocks Drop Before Fed’s Last Decision of the Year
• European Markets Close Lower as Central Banks Take Center Stage; Coffee Maker JDE Peet’s Falls 6%

Global Fixed Income

• Treasury Yields Stall Near Month’s Highs With Rate Cut Expected
• Treasury Yields Waver as Traders Await Federal Reserve Interest Rate Decision

Currencies

• Dollar Strengthens After Strong Retail Sales Data; Fed Cut in View
• EUR/USD Faces Pressure as Investors See Fed to Signal Fewer Rate Cuts

Energy

• Demand Concerns Continue to Weigh on Oil Ahead of Fed Meeting
• Crude Continues to Repeat Its Pattern

Metals

• Gold Continues to Fight Against Higher Rates in US
• Silver Continues to Test Trendline Area

Global Politics/News

• Wall Street Focus Shifts to Fed, Nvidia Slump
• A Top Russian General is Killed in a Moscow Bombing Claimed by Ukraine

Relevant Government Reports

World Agriculture Supply and Demand Estimates (WASDE)

USDA Agency Reports

Producer Price Index (PPI)

Consumer Price Index (CPI)

U.S. Treasury Report

Fed Report

EIA Reports

EIA Summary

Financial

Closing Commentary

Quote of the Day: Forgive many things in others; nothing in yourself. – Ausonius

Equities: Stocks were down today on Tuesday. The?Dow Jones Industrial Average?entered the history books Tuesday with its first nine-day losing streak since 1978. The 30-stock average slid 267.58 points to settle at 43,449.90. The?S&P 500?lost 23.47 points and closed at 6,050.61, while the?Nasdaq 100?dropped 95.57 points to end at 22,001.08. The Dow’s losing streak began the day after it closed above 45,000 for the first time ever earlier in the month. The Dow anomaly comes at a time when the broader market is doing well. The S&P 500 hit a new high on Dec. 6 and sits less than 1% from that level. The Nasdaq hit a record on Monday. Driving the Dow’s losses has been a rotation into technology stocks and out of some of the more old-economy stocks that gained in November following the reelection of?Donald Trump. Those stocks dominate the Dow, rather than tech. Some of the concern driving some profit-taking in the nontechnology stocks centers around the upcoming Federal Reserve interest-rate decision Wednesday. November’s retail sales figure came in better than economists expected Tuesday, adding to concern that the Fed may be taking unnecessary action. . TECHNICAL OUTLOOK – The Dow and S&P are above the 14, 21 day moving average.

Metals: Gold and silver prices are moderately lower in midday U.S. trading Tuesday, following a stronger-than-expected key U.S. economic report and just ahead of the U.S. data point of the week: the FOMC meeting of the Federal Reserve that began this morning and ends Wednesday afternoon with a statement and a press conference from Fed Chair Jerome Powell. The November U.S. retail sales report showed a better-than-expected increase of 0.7%, month-on-month, and beat expectations for a rise of 0.5%. This report is bearish for the precious metals as it falls into the camp of the monetary policy hawks, who want to see the Federal Reserve hold off on further interest rate cuts. While the vast majority of the marketplace still expects the FOMC to cut its main interest rate by 0.25% on Wednesday afternoon, the notion of additional cuts in 2025 are now in serious question due to recent stronger U.S. economic data, including today’s retail sales report. Gold is also likely seeing buying interest limited by some concerns of U.S. stagflation, with the potential for a slowing labor market meeting higher inflation, constraining the Fed’s ability to cut interest rates. The key outside markets today see the U.S. dollar index near steady. Nymex crude oil futures prices are lower and trading around $69.50 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.381%. Technically, February gold bulls have the overall near-term technical advantage but have faded. Prices are still in an uptrend on the daily bar chart, but just barely. Bulls’ next upside price objective is to produce a close above solid resistance at the December high of $2,761.30. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,600.00. March silver futures bulls have lost their slight overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at the December high of $33.33. The next downside price objective for the bears is closing prices below solid support at $30.00. TECHNICAL OUTLOOK – Gold and silver are back above the 14, 21 day moving average.

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DISCLAIMER: The Information and data contained herein was obtained from sources deemed reliable. The accuracy and completeness are not guaranteed

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