12/9-12/13/24 Weekly Market Recap - Movers, Macro, Monetary, and Fiscal


Week 12/9-12/13/24

Weekly Market Summary by Aremorph


Summary - Movers, Macro, Monetary, and Fiscal


This week was the first negative week of the SPX in 4 weeks, illustrating uncertainty in the market. Coming in hot, earnings reports, CPI & PPI data, as well as the FOMC meeting ticking closer and closer, the market reacted to many different catalysts. Take a look below to see what happened in the markets this week!

Finance Word of the Week! 

Animal Spirits: Coined by John Maynard Keynes in his book “The General Theory of Employment, Interest and Money,” Animal Spirits describes the instincts, proclivities and emotions that influence human behavior in finance. This can be measured through the consumer confidence index, showing how irrationality infiltrates the markets. 

Global Weekly Movements

U.S. Equities

  • S&P 500 Index: 6,051.09 (-0.52%)

    • Only two SPX ETFS were up this week: Communication Services (XLC) and Consumer Discretionary (XLY). (2.15%) and (2.88%) respectively. Consumer discretionary soared, led by Tesla and Lululemon, reflecting a strong economy that was signaled with the job reports last week. Loss leaders included Utilities (XLU), Energy (XLE), and Health Care (XLV), down (3.84%), (3.15%), and (2.82%) respectively. 

  • Dow Jones Industrial Average: 43,828.06 (-1.81%)

  • NASDAQ Composite: 19,926.72 (0.52%)

  • Big Movers of the Week

    • Broadcom (AVGO): 224.8 (25.52%)

      • Touting strong earnings per share for the quarter, the real news that rallied the bull was their guidance announcement in the AI Chip sales forecast for the next three years. They envision chip sales to reach a peak of $90 billion in the fiscal year that ends in November 2027.

    • Tesla (TSLA): 436.23 (9.67%)

      • The Trump transition team proposed eliminating a federal crash-reporting rule pivotal for overseeing automated-driving safety. Tesla, which opposes the rule, argues it unfairly highlights its safety record, while critics warn its removal could weaken oversight. Tesla shares jumped this week on optimism about potential regulatory changes.

    • Warner Bros (WBD): 12.07 (11.76%)

      • Warner Brothers stock surged after their announcement of their restructuring plan to align their business into cable and streaming units. The restructuring will be finalized in mid-2025

    • NVIDIA (NVDA): 134.25 (-3.26%)

      • China initiated anti-trust lawsuits against Nvidia that could cost Nvidia up to $1 billion dollar fine. This lawsuit highlights anti- monopoly laws against Nvidia’s 2019 acquisition of an Israeli company Mellanox Technologies. Even though the stock was down just over 3%, since Nvidia is the second largest weighted company in the SPX at 6.58%, it certainly moved the market. 

    • Super Micro Computer (SMCI): 36.45 (-23.94%)

      • Auditor issues from October show their reminisce as EY resigns as the auditor for SMCI. After CEO Charles Liang assured investors that SMCI would not get delisted, but as JPMC lowered their stock ranking to underweight, investor sentiment reflected in a bearish stock performance.

    • Alphabet Class C (GOOG): 191.38 (8.75%)

      • Quantum computation helps Google stock jump to an all time high as they unveiled their new quantum computing chip, Willow. Following, Google announced their latest AI model of Gemini 2.0 as well as a new FTC chair Andrew Furguson under Trump. With Furguson, expectations of decreased regulations and loosened antitrust laws boosted tech stocks.

Chinese Equities - Shanghai Composite (SHCOMP): 3,391.88 (-0.32%)

Hong Kong Equities - Hang Seng Index (HSI): 19.971.24 (1.21%)

Japanese Equities- Nikkei 2225 (NI225): 39,470.44 (0.35%)

European Equities

  • UK Index (UKX): 8,300.33 (-.0.10%)

  • German Index (DAX): 20,405.92 (-0.27%)

Commodities

  • Gold Futures: 2,665.9 (0.30%)

  • Crude Oil Futures: 70.3.38 (5.02%)

U.S. Monetary & Fiscal Policy:

CME Fedwatch: As the December FOMC meeting approaches, market expectations for a 25-basis-point rate cut have surged to 97.1% for a 25 basis point cut, with only 2.9% for no change. This marks an increase from previous two weeks where the % chance of a cut was 88% and 66% for respective weeks. With the market predicting a cut in this year, and less in the following year, keep your eye out for any revisions on the dot plot!


10 Year Treasury Yield: In the past week, the yield for 10 year treasuries has ticked up every day. With less demand for midlength maturity securities, this could be a reflection of weakening investor sentiment on the midterm outlook, with decreased demand decreasing the price, resulting in an increase in yields. 


Trump Tariffs and Canadian Trade War: In retaliation to possible American tariffs on Canada under Trump, Ontario Premier Doug Ford warned of a potential energy and mineral export ban if the proposed 25% tariff was enacted. For highlighted how Canada has a significant impact on the US energy, and would ban sale of American alcohol and critical minerals. Trump brushed off the concerns, citing that the US should not “subsidize” Canada. Despite this, both parties brace for escalating international trade tensions. 

Global Macroeconomic News:

US CPI & Core CPI: U.S. inflation rose slightly in November, with the annual CPI rate reaching 2.7%, while core inflation held steady at 3.3%, meeting expectations. Monthly CPI increased by 0.3%, driven by higher prices in shelter, used vehicles, and household furnishings, while core services inflation eased to 4.6%, reflecting slower growth in shelter and transportation. Core CPI remains at 3.3%, just at consensus which was already priced in. Given the data dependent Fed, these economic indicators could provide stronger insight to FOMC decisions down the line. 


US PPI & Core PPI: November's Producer Price Index (PPI) climbed 0.4% month-over-month and 3% annually, the largest yearly gain since February 2023, fueled by surging food prices. Core PPI, excluding food and energy, met forecasts with a 0.2% monthly increase, while unemployment claims rose unexpectedly, signaling potential labor market softening. Despite sticky inflation indicators, markets remain confident the Federal Reserve will cut rates next week, as policymakers weigh economic resilience against slowing progress toward their 2% inflation target.


South Korea Impeaches President Over Martial Law: South Korea's legislature voted 204-85 to impeach President Yoon Suk Yeol after his declaration of martial law. Yoon defended his decision as a response to a "disastrous crisis" but was accused of undermining democracy. With this political turbulence, there could be issues regarding supply chain and trade policies as well as geopolitical instability in Asia. Keep an eye out to see how South Korea's news could impact related securities!


United Healthcare CEO Shot Dead: Luigi Mangione, 26, has been charged with the murder of UnitedHealthcare CEO Brian Thompson, who was fatally shot outside the New York Hilton Midtown on December 4. As UnitedHealthcare navigates this leadership crisis, analysts are closely monitoring its ability to maintain strategic direction and operational stability. The healthcare sector, already facing regulatory scrutiny and cost pressures, could see heightened volatility, with ripple effects across insurance markets. UnitedHealth Group (UNH) stock has fallen (14%) in the past 10 days as a result of the tragic event.

Potentially Impacted Securities: XLV, UNH


Trump’s Vows for Russian Ukraine: “Time Magazine Person of the Year” Donald Trump states his “vehement” disagreement with sending missiles to Ukraine and into Russia. He preaches de-escalation of the war, citing tactics to promote diplomatic ceasefire and peace talks. While Trump refuses to share details on Ukraine joining NATO with US support, the Biden administration has voiced strongly that peace at the cost of Ukraine not becoming part of NATO would still be a great achievement for Putin, advancing his strategic interests. 

Potentially Impacted Securities: Gold, Crude, LMT, RTX

Sources: Google Finance, Market Watch, CME Fedwatch, Yahoo Finance, Reuters, New York Times, Bloomberg, Forexlive, Investors, Wall St Journal

Have a great week investing!

Sincerely,
Aremorph

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