Market Insights: Economic Data, Commodity Pressures, and Stock Trends

Image Source: Krish Capital Pty Ltd

Index Update

On Thursday, the Dow rose 0.04%, ending a 10-day losing streak, while the S&P 500 and Nasdaq fell by 0.09% and 0.1%, respectively. All three major indices are set to close the week with significant losses following the Federal Reserve's hawkish stance.

Market Movers

On Thursday, the top gainers were Currenc Group Inc. (+119.00%), followed by Mesoblast Limited (+52.08%). On the contrary, Quantum Corporation (-19.38%) and Micron Technology, Inc. (-13.81%) declined the most the same day.

Commodities Update

WTI crude oil futures dropped to around $69 per barrel, heading for a weekly decline due to a strong US dollar and concerns over slower Federal Reserve rate cuts. China's peak gasoline demand and weak market outlook added pressure, despite support from a larger-than-expected US crude stock draw and Kazakhstan’s backing of OPEC+ cuts. Crude is on track for a yearly decline, trading within its narrowest range since 2019, amid weak Chinese demand and rising non-OPEC production.

Macro Update

In November 2024, the US personal consumption expenditures (PCE) price index is expected to rise by 0.2% month-over-month, with core PCE also increasing by 0.2%. Annual headline PCE inflation is projected to reach 2.5%, while core PCE inflation is expected to rise to 2.9%. The Federal Reserve revised its 2025 PCE inflation forecast to 2.5% from 2.1%, reflecting higher expected inflation.

Futures Update

US stock futures were mostly flat on Friday as investors awaited the upcoming PCE price index report, which Fed Chair Jerome Powell expects to show inflation above the 2% target. Following the Fed's rate cut and outlook for fewer reductions in 2025, FedEx surged 8% after strong results, while Nike reversed gains post-earnings report.

On Friday, December 20th, Bitcoin traded at 97,646 USD, down 0.31% from the previous session. Over the past four weeks, Bitcoin declined by 0.99%, but its price increased by 121.84% over the last 12 months.

Following the sell-off observed in the previous session, stocks staged a significant rebound during early trading on Thursday. However, investor enthusiasm diminished as the day progressed, leading the major averages to close approximately flat. The Nasdaq dipped by 19.92 points, or 0.1 percent, settling at 19,372.77, while the S&P 500 declined by 5.10 points, or 0.09 percent, to finish at 5,867.07. From a technical perspective, the S&P 500 experienced a significant drop in the prior session, indicating a possible mean reversion trend in the near future. Additionally, the 14-period Relative Strength Index (RSI) falling below the neutral midpoint further supports a bearish outlook for the short term. Key levels to monitor include resistance at 5,975 and support at 5,790.