Skip to main content

Week in Review: 16-20 December 2024

Financial Markets

This week, the markets were shaken by hawkish statements by the FED, who signaled fewer and smaller rate cuts for 2025. The main stock market indices were down on Wednesday, and US bond yields adjusted up.

Overall, for the week, the S&P500 and the NASDAQ 100 lost 2% and 2.3%, respectively. More dramatically, the small cap index (Russel 2000) lost 4.5%, indicating a flight to quality and a risk-off attitude from investors and institutions.

Gold and silver lost 0.9% and 3.5%, respectively. Gold is on the lower range of the current trading channel, while silver is looking weaker and might continue to fall during the next days. If the price of gold doesn't remain in the current trading channel, it might go lateral or correct in the short/medium term. It seems like the rally in gold is cooling off.

WTI fell to 69.5$ and should continue in the 67-72$ range in the next week.

Bitcoin fell 7.5% and might fall back to 92-93k$ if the correction continues.

The relative strength of the US dollar (DXY) was up this week (~108). The EUR/USD is around 1.04$, the GBP/USD is at 1.26$, and the USD/JPY is at 156.4 JPY.

US M2 money supply at the date of 28th October 2024 was up by 0.42%.

The national financial conditions index (NFCI) for the week of 9th December 2024 loosened by 2% and doesn't translate signs of financial stress in the markets. Note that this indicator is delayed by a week.

US bond yields rose considerably this week, and now sit at 4.319% for the 2-year and 4.53% for the 10-year. The yield curve is uninverted and the recent moves indicate a bear steepener situation, where longer-term yields rise faster than the short-term rates.

The VIX spiked up to 28 and closed the week around 18, indicating more search for put options and fear from the part of investors/speculators.


Comment Section

This week might have marked a medium-term top in the US stock markets. We see a market correction as more likely than not, as we have been watching revenues and earnings top out in many sectors. The economic developments in Europe and in China are slow. This is the time to be selective and cautionary.

The possibility of a recessionary or stagflationary environment for the next few years should not be ruled out. The new US presidency will set the tone for worldwide cooperation, economic treaties/tariffs, and geopolitical risk (escalation or de-escalation of ongoing conflicts with Russia and the Middle East).
 
The next week (Christmas week) is going to be a short trading week. The NYSE will close early at 1:00 p.m. (1:15 p.m. for eligible options) on Tuesday, December 2024, 2024, and remain closed on the 25th of December. Markets re-open normally on the 26th December.
 
Enjoy the holidays, take care, and good luck.
 
 

 

Comments

Most Read

Week in Review: 23-27 September 2024

Financial Markets For the week, the main stock market indices were slightly up, with the S&P500 gaining 0.6% and the NASDAQ 100 up by 1.1%. The small cap index (Russel 2000) dropped 0.5%. Only the S&P closed at an all-time-high. Gold closed the week at a new all-time-high of 2657$/oz. Silver is still holding the 31$ level and it can go in either direction in the coming weeks, although we favor the downside from a fundamental perspective (slowing industrial demand). The barrel of WTI fell 3.7% and is again around 68$, which is a short-term technical support level. Bitcoin was up by 3.1% and seems to be in the top end of the 53-66k$ range it has been following for the past couple of months. The relative strength of the US dollar (DXY) fell slightly but is still around the 100-101 support level. The EUR/USD is at 1.12$, while the USD/JPY is slightly down to 142 JPY. US M2 money supply metrics have not been updated since the 26th of August. The national financial condit...

Week in Review: 21-25 October 2024

Financial Markets For the week, the main stock market indices were mixed, with the S&P500 losing 1% and the NASDAQ 100 up by 0.1%. The small cap index (Russel 2000) fell 3.1%, giving up the previous week's gains. The precious metals remained strong but are about to stall. Gold gained 0.9% while silver ended the week unchanged. Recently silver broke out of the 32$ level and now needs to defend this level. WTI jumped off the 68$ level, and gained 4.1% this week -it now sits at ~71.6$/bbl. Bitcoin fell 2.7% and is in the upper range of the channel it has been trading in since March 2024. In our opinion, bitcoin it is not looking particularly bearish nor bullish. It can go up to 74k or down to 60k in the near future. The relative strength of the US dollar (DXY) was again up slightly and into the 104 level. The EUR/USD is around 1.08$, while the USD/JPY is at 152 JPY. US M2 money supply at the date of 30th September 2024 was up by 0.38%. The national financial conditions ...

Week in Review: 7-11 October 2024

Financial Markets For the week, the main stock market indices were up, with the S&P500 gaining 1.1% and the NASDAQ 100 up by 1.2%. The small cap index (Russel 2000) rose 0.9% but seems to be on a downward trend. Gold is unchanged and seems to be consolidating around the 2600$/oz level. Silver fell 2.1% and will likely continue in the 30-32$ range in the near future. The barrel of WTI gained 1.4% and hit the 75$ level, which could be resistance - this would send oil lower over the next weeks. Bitcoin was unchanged this week and is close to the middle of the 53-66k$ range it has been trading in for the past months. The relative strength of the US dollar (DXY) was up slightly but still holds the 102 level. The EUR/USD is around 1.09$, while the USD/JPY is at 149 JPY. US M2 money supply metrics have not been updated since the 26th of August. The national financial conditions index (NFCI) for the week of 30th September 2024 loosened by 2.1% and doesn't translate signs o...