U.S. stocks seem poised to kick off the new week with a subdued tone, riding the coattails of recent gains and influenced by two significant Main Street catalysts: the Federal Reserve’s rate-setting meeting and the November inflation report. The prevailing sentiment is cautious, with attention turning to Treasury auctions, particularly the 10-year notes, and the market’s response to them, which could heavily impact trader sentiment. Until these key catalysts play out, the market may experience limited momentum.
Recap Of Last Week’s Trading:
In the week ending Dec. 8, stocks sustained upward momentum, although buying interest waned. The three major averages, along with the Russell 2000 Index featuring small-cap stocks, closed in positive territory.
Reflecting on the economic developments of the past week, Brad McMillan, Chief Investment Officer at Commonwealth Financial Network, expressed positivity. He highlighted that the November jobs report revealed job additions surpassing expectations for the month, even though the pace of job growth has significantly slowed from the robust levels observed earlier this year. Additionally, the University of Michigan’s consumer sentiment reading exceeded expectations, indicating positive prospects for holiday sales.
“The U.S. economy continues to chug along and is still headed for a soft landing. Interest rates have largely normalized, and markets are following suit,” he said.
US Index Performance In Week Ended Dec. 8
| Index | Performance (+/-) | Value |
| Nasdaq Composite | +0.69% | 14,403.97 |
| S&P 500 Index | +0.21% | 4,604.37 |
| Dow Industrials | +0.01% | 36,247.87 |
| Russell 2000 | +0.98% | 1,880.82 |
Analyst Color:
Rooting for “higher for longer” could be better for investors right now, said LPL Financial Chief Equity Strategist Jeffrey Buchbinder. Market-watchers have opined that the first rate cut come soon and it would be good for stocks, he said.
“Once the cut comes, typically the Fed has gone too far and recession is near (or already started),” the analyst said. “Further, markets tend to get jittery ahead of the cut,” he added.
Buchbinder noted that an examination of Fed rate cycles since the 1970s revealed that investors don't have much to look forward to when looking at how stocks do during the first six months following the first Fed rate cut.
Futures Today
Futures Performance On Monday
| Futures | Performance (+/-) |
| Nasdaq 100 | -0.03% |
| S&P 500 | -0.08% |
| Dow | -0.16% |
| R2K | -0.05% |
In premarket trading on Monday, the SPDR S&P 500 ETF Trust SPY moved down 0.04% to $460.01 and the Invesco QQQ ETF QQQ slipped 0.16% to $391.54, according to Benzinga Pro data.
Upcoming Economic Data:
The Federal Open Market Committee meeting is the key economic catalyst the market looks forward to in the unfolding week. The rate-setting committee kickstarts the meeting on Tuesday and the central bank would release the post-meeting policy statement and updated summary of economic projections, which also contains the dot-plot chart, at 2 p.m. ET on Wednesday.
The November consumer price inflation report that is scheduled to be released ahead of the Fed decision will also be on investors’ radar. Among the other data due for the week are the weekly jobless claims data, the November producer price inflation, retail sales and industrial production data, and the results of the Empire State Manufacturing survey for December.
The New York Federal Reserve will release the results of its consumer price inflation expectations survey at 11 a.m. ET on Monday.
The Treasury will auction six-month and three-year notes at 11:30 a.m. ET and 10-year note at 1 p.m. ET.
See also: Best Futures Trading Software
Stocks In Focus:
- Humana, Inc. HUM and Cigna, Inc. CI rose over 2.5% and 11%, respectively after the companies called off the proposed combination. Cigna also announced a $10 billion stock buyback plan.
- Lucid Group, Inc. LCID fell over 6% following Nasdaq’s announcement that it would be removed from the Nasdaq 100 Index.
- Pinterest, Inc. PINS rose nearly 4% on a positive analyst action.
- Casey’s General Stores, Inc. CASY and Oracle Corp. ORCL are scheduled to report their financial results after the market closes.
Commodities, Bonds, Other Global Equity Markets:
Crude oil futures moved down 0.56% to $70.83 in early European session on Monday and the benchmark 10-year Treasury note rose 0.013 percentage points to 4.258%.
The major Asian stocks had a mixed session, with the Japanese and Chinese markets rallying strongly, while the Hong Kong, Indonesian, New Zealand, and Singaporean markets settled lower for the day. European stocks traded on a mixed note by late-morning trading. The markets appear to be playing a waiting game to see off the Fed meeting.
This illustration was generated using artificial intelligence via MidJourney.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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