The US stock market opened higher on Monday, December 16, 2024, with investors focused on the Federal Reserve’s impending interest rate decision. The Fed’s final meeting of the year is widely expected to result in a 25 basis point interest rate cut. This week also sees the release of key economic data, including November’s Core PCE and US retail sales figures.
Table Content:
Market Performance and Key Economic Indicators
The major US indexes showed positive movement shortly after the opening bell:
- S&P 500: 6,064.94, up 0.24%
- Dow Jones Industrial Average: 43,841.47, up 0.03% (+13.41 points)
- Nasdaq Composite: 20,006.66, up 0.40%
The Federal Reserve’s decision on Wednesday is crucial. A 25 basis point rate cut is anticipated, but the subsequent market reaction will hinge on the Fed’s forward guidance. Friday’s release of the November Core PCE inflation data will provide further insight into the Fed’s likely course of action regarding future rate cuts in early 2025. According to Fundstrat’s Tom Lee, these two data points are the key macroeconomic drivers for the remainder of the month.
Market Sentiment and Expert Predictions
Tom Lee suggests a positive outlook for the final weeks of 2024. He cites seasonal trends favoring a strong December finish and the current investor positioning as supportive of risk assets. Lee points out that with a significant percentage of institutional investment managers underperforming benchmarks, they are less inclined to sell stocks and more likely to buy on dips, further bolstering market strength.
Beyond the Fed meeting and PCE data, this week’s economic calendar includes releases on US retail sales, housing starts, building permits, and revised third-quarter GDP figures. These data points will provide a more comprehensive picture of the US economy’s health and could influence market sentiment.
Commodities, Bonds, and Cryptocurrency Markets
In other markets:
- Oil: West Texas Intermediate crude oil fell slightly to $70.95 per barrel, while Brent crude dipped to $74.15.
- Gold: Experienced a minor increase, trading at $2,679.10 per ounce.
- Bonds: The 10-year Treasury yield decreased slightly to 4.382%.
- Cryptocurrency: Bitcoin saw a marginal decline, trading at $104,222.
Conclusion
The week ahead is pivotal for the financial markets. The Federal Reserve’s interest rate decision and the release of crucial economic data will significantly impact investor sentiment and market direction. While current market trends and expert opinions suggest a positive outlook for the remaining weeks of 2024, the actual outcome remains dependent on these upcoming events. Market participants will be closely monitoring these developments for clues about the future trajectory of the economy and financial markets.
