US Market Update
US Futures Overview
Dow Futures: +0.12% at 44,663
S&P Futures: -0.01% at 6085
Nasdaq Futures: -0.14% at 21579
European Markets
FTSE: +0.64% at 8359
DAX: +0.19% at 20405
- US stocks expect a new catalyst for movement
- Expectations for a Federal Reserve rate cut in December increase after the latest jobs data
- Global geopolitical concerns maintain a cautious investor sentiment
- Oil prices increase as China signals a shift towards an accommodating monetary policy
Market Sentiment and Trends
U.S. stocks are poised for a subdued opening following a week of record high performances as investors await the upcoming inflation metrics scheduled for release this week.
Throughout the last three weeks, stock markets in the U.S. have surged, continuing to react positively to ongoing economic policies.
This week’s highlight will be the Consumer Price Index (CPI) report due on Wednesday, with forecasts indicating a 0.2% month-on-month increase and a yearly rise to 2.7%. This reflects a slight uptick from the previous month's 2.6%.
Market expectations for a 25 basis point rate cut in December have surged to 85% following the release of the nonfarm payroll (NFP) report, which indicated job growth in November alongside an increase in the unemployment rate to 4.2%. Following potential cuts in December, subsequent reductions are anticipated on a quarterly basis.
Ongoing updates from regions such as Sri Lanka, France, and South Korea are being closely monitored, contributing to a cautious trading environment and a boost in demand for safe-haven assets like gold.
Corporate Developments
Macy's stock is set to rise by approximately 3% on news that activist investor Barrington Capital is advocating for the formation of a real estate unit and exploring possibilities with Bloomingdale’s and Bluemercury Chains after acquiring an undisclosed share.
Tesla shares are showing an increase of over 2% following a Deutsche Bank report identifying the electric vehicle manufacturer as a top choice for 2025, citing its advancements in autonomous driving technology and operational resilience.
In contrast, Nvidia shares are down 2% after China initiated a probe into the company for alleged anti-monopoly violations.
Chinese stocks are anticipated to open substantially higher in response to the Chinese politburo's recent hints at a looser monetary policy for the coming year. Noteworthy premarket gains include Alibaba's 6% rise and a 9% jump for PDD.
S&P 500 Technical Outlook
The S&P 500 index has been on an upward trend, marking fresh highs near the key level of 6100, although the momentum appears to be softening. Buyers may look towards 6150, where a rising trendline resistance exists. Support zones are identified at 6027 (the November high), with further support at 6000 and then 5970 along the trendline.
Forex Market Insights
The US dollar remains stable following gains from the previous week, with focus now directed towards Wednesday's inflation report for further market clues.
The EUR/USD pair remains unchanged, despite a significant drop in investor confidence to a 13-month low, as evidenced by the Sentix Investor confidence gauge's decline to -17.5 from -12.8 amidst a deteriorating economic forecast and political instability in France and Germany.
The AUD/USD pair has gained over 1% as a result of China's announcement regarding a shift to a looser monetary policy, which could promote growth and restore confidence for Australia's primary trading partner.
Oil Market Response
Oil prices have surged by more than 1.4% at the beginning of the week, influenced by geopolitical events in the Middle East and a decision by China regarding its monetary policy.
Recent reports indicate that China is shifting towards a more accommodating monetary policy, similar to measures taken during the post-global financial crisis recovery in 2010, fostering positive expectations for economic growth and oil demand.
Concurrently, OPEC+ has pointed to a weak demand outlook in China as a key reason for maintaining production cuts through Q2 2025.
Additionally, escalating political turmoil, including the recent overthrow of Syrian President Bashar al-Assad by rebels, adds to uncertainties in the Middle East.
