Indices Overview
Here is a summary of the major indices and their performance over the past week (5 working days):
S&P 500 Index (SPX): The latest close is 6,050.83, with a -0.03% change over the past 5 days.
Russell 2000 Index: The latest close is 2,346.76, reflecting a -1.93% change over the past 5 days.
Dow Jones Industrial Average (DOW): The latest close is 43,828.10, indicating a -1.29% change over the past 5 days.
Philadelphia Semiconductor Index (SOX): The latest close is 5,149.67, showing a 2.61% change over the past 5 days.
NASDAQ Composite: The latest close is 21,780.25, marking a 1.58% change over the past 5 days.
As of December 13, 2024, the VIX stands at 13.81, reflecting a -2.68% change in market anxiety.
1. Geopolitical Environment
Middle East:
Tensions have escalated in Gaza, with reports of ceasefire negotiations stalling between Hamas and Israel. Civilian displacement has increased significantly.
Syria: Rebels have entered Damascus, prompting Assad to flee to Moscow. Russian forces are withdrawing, and Syrians are celebrating the end of Assad's rule. The U.S. is advocating for a peaceful transition to prevent instability.
Ukraine:
Russia has intensified drone strikes on Kyiv, targeting critical infrastructure. President Zelensky’s appeals for NATO intervention have gained urgency.
Tensions have escalated in Gaza, with reports of ceasefire negotiations stalling between Hamas and Israel. Civilian displacement has increased significantly.
Syria: Rebels have entered Damascus, prompting Assad to flee to Moscow. Russian forces are withdrawing, and Syrians are celebrating the end of Assad's rule. The U.S. is advocating for a peaceful transition to prevent instability.
Russia has intensified drone strikes on Kyiv, targeting critical infrastructure. President Zelensky’s appeals for NATO intervention have gained urgency.
South Korea:
President Yoon Suk Yeol has survived impeachment proceedings, but political unrest continues as opposition parties challenge recent policy decisions.
Romania:
Political turmoil persists after the annulled presidential election, with rising far-right movements complicating NATO and EU relations.
2. Global Economic Environment
Recent Data Releases:
Nonfarm Payrolls: The U.S. economy added 230,000 jobs in November, surpassing expectations of 200,000.
Wage Growth: Average hourly earnings rose by 4.1% year-over-year to $35.72.
Upcoming Economic Indicators:
December 18: November CPI report – Expected to shape Federal Reserve decisions.
December 19: Retail Sales Data for November – A critical indicator for consumer spending trends.
3. Central Bank Policies
European Central Bank (ECB):
The ECB cut interest rates by 0.25% during its December meeting, marking the fourth reduction this year. This decision lowered the deposit facility rate to 3.00%, aimed at supporting economic growth amid signs of weakening activity and steering inflation toward the 2% target.
Federal Reserve (FOMC):
The December 17–18 meeting is expected to maintain rates but signal caution amid moderating inflation.
Bank of Japan (BOJ):
Policymakers are considering raising interest rates during the December 18–19 meeting, responding to persistent inflation and wage growth pressures.
4. Corporate Earnings
Key Earnings from Last Week:
Oracle Corporation (December 9): Oracle's Q2 fiscal 2025 earnings fell short of expectations, reporting $12.9 billion in revenue compared to the $13.2 billion consensus estimate. Shares dropped 4.6% during the week due to weaker-than-expected cloud growth, despite optimistic guidance for 2025.
Broadcom Inc. (December 12): Broadcom reported fiscal fourth-quarter earnings exceeding expectations, driven by robust demand for AI-related semiconductor solutions. Shares surged by 24.4%, closing at $224.80 on December 13, 2024.
Earnings for the Coming Week:
December 18: FedEx Corporation, Nike Inc.
5. Seasonality
Year-End Trends:
Institutional investors continue to bolster markets with year-end rebalancing. However, weaker-than-expected retail sales could dampen momentum.
Market Risks:
Persistent geopolitical tensions and mixed economic data could disrupt the usual holiday rally.
6. Volatility
Current State:
VIX at 13.81 remains below historical averages, reflecting a -2.68% change in market anxiety.
Outlook:
Our models suggest a range between 14 and 16.5 for VIX over the next week, with heightened sensitivity to geopolitical and economic headlines.
Disclaimer
This report is provided for informational purposes only and does not constitute financial, investment, or trading advice. Market conditions can change rapidly, and this report reflects publicly available data as of December 13, 2024. For personalized advice, consult a licensed financial advisor. Neither the authors nor distributors accept liability for any losses incurred directly or indirectly from reliance on this information.
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