Welcome to this week’s edition of the Weekly Trading Insight! As we navigate through a dynamic market landscape influenced by technological advancements and key economic indicators, our aim is to equip you with the necessary insights to make informed trading decisions. This week, we delve into the latest market data, highlight significant trends, and identify opportunities that lie ahead.
Market Recap
- US 30: Closed at 44,626.50, down -139.2 points or -0.31%.
- US 500: Ended at 6,086.30, gaining +11.2 points or +0.18%.
- Dow Jones: Finished at 44,642.52, down -123.19 points or -0.28%.
- S&P 500: Reached 6,090.27, up +15.16 points or +0.25%.
- Nasdaq: Closed at 19,859.77, rising +159.05 points or +0.81%.
- S&P 500 VIX: Dropped to 12.77, down -0.77 points or -5.69%.
- Dollar Index: Increased to 105.734, up +0.340 or +0.32%.
Feature Analysis: ECB Set to Signal Gradual Rate Cuts Amid Evolving Economic Outlook
The European Central Bank (ECB) is anticipated to cut interest rates by 25 basis points to 3% at its December 12 meeting, with further reductions expected through mid-2025, bringing the deposit rate to a neutral 2%. Analysts predict inflation will hit 2% by 2025, prompting the ECB to soften its restrictive policy tone. Updated projections include slightly lower 2024 inflation at 2.4% and modest GDP growth by 2026. Markets may see German 2-year yields fall further, with a bearish euro outlook targeting EUR/USD at 1.04 by late 2025, vulnerable to U.S. policy shifts under the incoming administration.
Trading Strategies and Ideas
- S&P 500 Index: The SPX continued its climb into all-time high territory this week, displaying a “melt-up” pattern that feels steady rather than overextended. The index is nearing the upper band of its uptrend, and the RSI has reached the 70 level, which has previously signaled a pause or slight pullback. Despite these signals, there isn’t strong evidence for a consolidation yet, so the near-term technical outlook remains slightly bullish.
- Russell 2000 Index: The Russell 2000 (RUT) pulled back to its 20-day SMA and has found support at this level, with today’s candle reinforcing that as a near-term floor. The index reached a fresh all-time intraday high on November 26, solidifying its long-term uptrend. Near-term technical outlook: bullish.
Upcoming Economic Events
- Monday (Dec. 9): Wholesale Inventories
- Tuesday (Dec. 10): Productivity (Revised), Unit Labor Costs (Revised)
- Wednesday (Dec. 11): Consumer Price Index (CPI), EIA Crude Oil Inventories, MBA Mortgage Applications Index, Treasury Budget
- Thursday (Dec. 12): Producer Price Index (PPI), EIA Natural Gas Inventories, Initial Claims, Continuing Claims
- Friday (Dec. 13): Export Prices ex-ag, Import Prices ex-oil
For detailed insights and more information, visit Reuters and Yahoo Finance.
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Disclaimer
This newsletter is for informational purposes only and does not constitute financial advice. Always do your own research and consider consulting a financial advisor.
