US Stocks Rebound, Bitcoin ETFs See Record Outflows, and Gold Hits $2,620 - Key Moves and Trends for December

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Index Update - US stocks bounced back on Friday, recovering from early losses to trade 1.5% higher. The S&P 500 rose 1%, Nasdaq up 0.8%, & Dow gained 497 points. Markets reassessed the impact of fewer Fed rate hikes next year, bolstered by softer November PCE inflation data.

Market Movers - The healthcare sector took the spotlight after Novo Nordisk’s new obesity drug missed targets in its test, driving the pharmaceutical giant’s ADRs to plunge over 20%. In turn, equities for competitor Eli Lilly surged 5%.

Macro Update - US Bitcoin ETFs experienced a record $680M net outflow on Thursday, surpassing the previous daily high of $563M set in May. This shift followed a 15-day streak of inflows that helped push Bitcoin above $100K. The outflows came after the Fed hinted at fewer interest rate cuts in 2025, marking a pullback that many consider healthy and overdue. US fiscal spending is skyrocketing, with government expenditures hitting a staggering $6.9 TRILLION over the past year, the highest since 2021. Social Security, interest costs, healthcare, and defense were the largest outlays. Spending has doubled in the past decade, only surpassed by pandemic-era stimulus in 2020-2021. Meanwhile, federal debt hit a new record of $36.2 TRILLION, as the government continues to spend at crisis levels.

Commodities Update - Gold surged above $2,620/oz on Monday, extending gains after a soft PCE inflation report boosted hopes for Fed easing in 2024. Despite challenges from weakening demand in India, gold remains up 27% this year, on track for its best annual gain since 2010. Meanwhile, silver dipped toward $29/oz, pressured by Fed’s hawkish stance and weaker industrial demand, especially in China’s solar panel market.

Futures Update - US stock futures surged Monday after the S&P 500 posted its biggest gain since early Nov, fueling optimism for a potential Santa Claus rally to close out 2024. PCE & headline inflation came in lower than expected, easing cost pressure. Meanwhile, Biden signed a funding bill to avert a gov't shutdown, and Apple proposed a $1B investment in Indonesia to lift its iPhone 16 sales ban. Trading could remain subdued as Christmas approaches.

After a subdued start, stocks experienced a significant rally throughout the trading day on Friday. The major indices rebounded from initial losses and steadily moved into positive territory as the day advanced. The tech-heavy Nasdaq advanced by 199.83 points, or 1.0 percent, reaching 19,572.60, while the S&P 500 jumped 63.77 points, or 1.09 percent, to settle at 5,930.84. From a technical standpoint, the S&P 500 continues to operate within an upward trend channel, suggesting the possibility of further gains. The 14-period Relative Strength Index (RSI) is also situated within a positive range. Key levels to watch include resistance at 6,080 and support at 5,870.