Stock Market Week December 9 – what to expect, how to trade
This article concisely overviews the most significant macroeconomic events on the stock market from December 9-13. I also discuss the most intriguing earnings for the week and share my strategy on my stock picks.
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Recap: Top Stories and Events from December 2 – 6
During the week of December 2nd to 6th, the stock market climbed to new heights. The S&P 500 Index increased by 0.83% week-over-week, while the Nasdaq 100 made a stunning leap of 3.10%. This surge was fueled by solid financial reports from companies like Salesforce (CRM), Lululemon (LULU), and Pure Storage (PSTG). If you recall my previous market analysis for the week of December 2, I highlighted my expectation for continuing a positive move in the Nasdaq 100 Index rather than in the small caps.
A significant highlight of the week was the release of the U.S. nonfarm payroll report, which shed light on employment trends and swayed investor sentiment. The report showed stronger-than-expected job growth, boosting market confidence. The economy added 227,000 jobs in the past month, surpassing expectations of 215,000. This was a significant jump from the previous month’s revised figure of 36,000, skewed by hurricanes and strikes. The unemployment rate nudged up to 4.2%, as anticipated.
Following this data release, the likelihood of a 25 basis point rate cut surged to 86%, according to the CME FedWatch Tool—a notable rise from the previous week. Federal Reserve Chair Jerome Powell’s appearance grabbed attention, as investors keenly listened for any hints on future monetary policy and potential interest rate cuts. Powell’s dovish tone further bolstered investor confidence, suggesting a more relaxed monetary policy in the coming weeks.
This optimism helped the S&P 500 and Nasdaq Composite reach record highs. However, not all indices shared this fortune; the Dow Jones Industrial Average and the Russell 2000 experienced declines, falling 0.6% and 1.37% week-over-week, respectively. markdown From a technical standpoint, the S&P 500 Index seems to be heavily overbought — and this isn’t the first time we’ve seen it like this. My predictions from last week hit the nail on the head, so there’s not much to tweak in my technical chart analysis. Looking ahead to the macroeconomic releases coming up the week of December 9, I don’t foresee much volatility until Wednesday, December 11. The stock market is likely to inch upwards, but don’t expect fireworks — the pace and buying volume will probably be much more subdued.
What To Expect, How To Trade
Let’s examine the key macroeconomic data for the week of December 9-13.
Monday kicks off quietly with low trading volumes and pretty flat market moves — a good day to catch your breath.
Tuesday starts to heat up with the release of Germany’s CPI data for November. The market’s not predicting any shifts, expecting the CPI to hold steady at 2.2% year-over-year. But I think we might see a spike in inflation come December and January 2025, thanks to rising costs in electricity and food. For instance, Austrians are bracing for a 25% hike in electricity prices starting January 2025.
Later in the day, brace for more market turbulence as the U.S. Nonfarm Productivity and Unit Labor Costs reports for Q3 2024 rollout.
Wednesday promises a rollercoaster ride, with all eyes on the U.S. CPI data. The market is forecasting a 2.6% year-over-year climb for November 2024. This report is crucial, especially with an interest rate decision looming on December 18. If the CPI overshoots expectations, we could see a rapid shift in market sentiment.
Thursday keeps the momentum going with the release of Initial Jobless Claims and U.S. PPI data.
Amidst the flurry of macroeconomic data, the spotlight stays on the CPI, PPI, and the ECB interest rate decision on Thursday, December 12. I believe these will be the key indicators shaping the stock market’s near-term trajectory.
Senior Managing Director
2 个月Iryna Trygub-Kainz, MBA, FRM? Very Informative. Thank you for sharing.