Global Economic Daily 12/23/2024
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NEWS AND MARKET COMMENTARY
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Closing Commentary
Quote of the Day: No one has a greater asset for his business than a man’s pride in his work. – Hosea Ballou
Equities: Stocks ended the week on a high note. The Dow Jones Industrial Average bounced on Friday to close out a tough week that saw the index plunge 1,100 points in a single day and complete its longest losing streak since the 1970s. Some cooler-than-expected inflation data helped fuel the session's rebound. The 30-stock Dow gained 498.02 points to 42,840.26. The S&P 500 added 63.77 points to end at 5,930.85, while the Nasdaq 100 advanced 178.65 points and closed at 21,289.15. November’s reading of the personal consumption expenditures price index — the Federal Reserve’s preferred inflation metric — increased 2.4% year over year. That was a tad less than economists expected and helped defuse some of the bearishness that arose earlier this week when the Fed said it would dial back future rate cuts in part because of stubborn inflation. All 11 sectors of the S&P 500 ended the day higher, with real estate and information technology among the biggest gainers. Just 53 stocks in the broad market index closed lower on Friday. Chicago Fed President Austan Goolsbee told CNBC’s Steve Liesman he was encouraged by Friday’s inflation figures and that rates could still decline next year despite the central bank’s cautious stance. It was a positive end to a tumultuous week. During Thursday’s trading session, the Dow eked out a 15-point gain and ended a 10-day losing streak, its longest since 1974. The small gain came a day after the Dow plunged 1,100 points on Wednesday. The Fed’s indication of just two cuts next year, instead of the four it originally forecast, was the catalyst for the decline. Even as the major averages jumped on Friday, all three booked losses on the week. The Dow lost nearly 2.3%, notching its third straight losing week. The S&P 500 fell almost 2% week to date, while the Nasdaq Composite was off by about 1.8%. Elsewhere, a Trump-endorsed House Republican measure to fund the government for three months and avert a government shutdown failed on Thursday. Without a deal, a partial shutdown is slated to start late Friday night. TECHNICAL OUTLOOK – The Dow is below the 14, 21 day moving average, while the S&P remains above.
Metals: Gold prices are moderately higher in early U.S. trading Friday, following a U.S. inflation report that came in just a bit cooler than expected. Short covering from the shorter-term futures traders is also featured after gold hit a four-week low Thursday. The just-released U.S. personal income and spending report for November showed the key PCE inflation indicator up 2.4%, year-on-year, with the core PCE rate up 2.8%. Those numbers were slightly cooler than expected. It’s been said the Federal Reserve officials pay extra close attention to the PCE inflation numbers. Asian and European stock indexes were mostly lower overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins but up from overnight multi-week lows after rebounding a bit on the PCE numbers. Risk aversion is keener to end the trading week. The Republican-led U.S. House of Representatives rejected a temporary government funding plan backed by President-elect Donald Trump. That raises the risk of a U.S. government shutdown tonight. Republicans will regroup and come up with another solution, said House Speaker Mike Johnson. In other news, Trump threatened the European Union with tariffs if its member countries don’t buy more U.S. oil and natural gas. The Euro currency strengthened against the U.S. dollar in a sign traders believe the EU will be able to meet Trump’s demands. Today is the quarterly “triple-witching” expirations that will see $6.5 trillion worth of options on individual stocks, stock indexes and exchange-traded funds expire. Today’s expirations are this year’s largest and among the biggest on record, according to a derivatives analytical firm. The sell off in Bitcoin has picked up steam late this week as investors pulled out of ETFs that invest in Bitcoin. The key outside markets today see the U.S. dollar index lower on a corrective pullback from this week’s strong gains. Nymex crude oil futures prices are modestly down and trading around $69.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently around 4.5%--this week hitting the highest yield since May. Technically, February gold futures bulls have lost their slight overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at $2,700.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the November low of $2,565.00. March silver futures bears have the overall near-term technical advantage. A two-month-old downtrend is in place on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $31.00. The next downside price objective for the bears is closing prices below solid support at the August low of $27.39. TECHNICAL OUTLOOK – Gold is above the 14, 21 day moving average, while silver is now below.
DISCLAIMER: The Information and data contained herein was obtained from sources deemed reliable. The accuracy and completeness are not guaranteed
Futures and options trading involves substantial risk and is not suitable for all investors. Therefore, individuals should carefully consider their financial condition in deciding whether to trade. Option traders should be aware that the exercise of a long option will result in a futures position. The valuation of futures and options may fluctuate, and as a result, clients may lose more than their original investment. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.