12/2-12/6/24 Weekly Market Recap - Movers, Macro, Monetary, and Fiscal



Week 12/2-12/6/24

Weekly Market Summary by Aremorph


Summary - Movers, Macro, Monetary, and Fiscal


This week, the market was impacted by many indicators such as: ADP employment, initial jobless claims, and Trump’s support for Paul Atkins as SEC chair. With the FOMC meeting occurring in less than 2 weeks, keep your eyes peeled for news that might impact the verdict! Moreover, this week was littered with exciting earnings reports adding fluctuations into the markets.

Global Weekly Movements

U.S. Equities

  • S&P 500 Index: 6,090.22 (0.83%)

    • The Communication Services (XLC) sector gained 2.19%, alongside strong rebounds in Consumer Discretionary (XLY) and Technology (XLK), up 3.62% and 3.6%, respectively, as optimism around lower interest rates boosted growth stocks. Conversely, defensive and cyclical sectors faced headwinds. Energy (XLE) declined 2.66% amid fluctuating oil prices, while Real Estate (XLRE) and Utilities (XLU) fell 3.05% and 2.67%, pressured by concerns over rate-sensitive assets and declining investor demand. These movements reflect shifting market sentiment toward sectors more sensitive to monetary policy expectations.

  • Dow Jones Industrial Average: 44,632.52 (-0.63%)

  • NASDAQ Composite: 19,859.77 (3.14%)

  • Big Movers of the Week

    • Intel Corp (INTC): 20.92 (-15.76%)

      • Intel's stock fell 15.76% following the announcement of its CEO's departure, sparking concerns over the company's future. The leadership change adds uncertainty amid ongoing challenges in the semiconductor industry and intensifying competition.

    • Lululemon Athletica (LULU): 399.6 (23.45%)

      • Lululemon surpassed earnings expectations in its latest report and raised its guidance for the upcoming quarter. The strong performance reflects continued demand for its athletic wear, bolstering investor confidence in the company's growth prospects as well as the stock price.

    • Meta Platforms (META): 623.77 (8.04%)

      • Meta Platforms saw an 8% surge in stock price following a federal appeals court ruling that upheld a law which could lead to a TikTok ban in the U.S. The ruling, which denies a challenge from TikTok's parent company ByteDance, boosts the outlook for Meta as analysts expect TikTok users to migrate to Meta's Reels feature on Instagram and Facebook. 

    • Ulta Beauty (ULTA): 428.17 (10.92%)

      • Ulta Beauty surpassed earning expectations in the third fiscal quarter. Despite competition and cooking demand, raising full year guidance and new brand initiatives rallies confident investors to drive up the stock price.

    • Super Micro Computer (SMCI): 43.93 (16.48%)

      • The 6 month fall of SMCI of roughly 80% has seen some remedy this week, rising over 15% to recover the previous volatility and bearish outlook. 

    • Palantir (PLTR): 76.34 (13.23%)

      • Notorious bullstock this year which saw over 1,100% growth in 2 years continues to rally as the new governmental stance of AI and technology becomes more accepting, boosting future outlook on Palantir’s government contracts. 

Chinese Equities - Shanghai Composite (SHCOMP): 3,404.08 (2.27%)

Hong Kong Equities - Hang Seng Index (HSI): 19,865.85 (2.18%)

Japanese Equities- Nikkei 2225 (NI225): 39.091.17 (2.29%)

European Equities

  • UK Index (UKX): 8,308.61 (0.26%)

  • German Index (DAX): 20,384.61 (4.08%)

Commodities

  • Gold Futures: 2,655.20 (0.15%)

  • Crude Oil Futures: 67.17 (-1.70%)

U.S. Monetary & Fiscal Policy:

CME Fedwatch: As of December 6, the probability of a 25 bps rate cut has risen to 88.8%, up from 66% on November 29, while the likelihood of no cut has fallen to 11.2%. This reflects a growing consensus that the Fed is moving closer to its year-end rate targets, driven by its data-dependent approach amid easing inflation and economic stabilization. With rate dependent securities pricing in a 25 bps rate cut at the next FOMC meeting, there is potential to capture upside if you believe the Fed will not cut rates.


Yield Curve November 2024  vs December 2024: The U.S. Treasury yield curve saw a shift from November to December 2024, with short-term yields decreasing at a faster pace than long-term yields. This movement represents a bull steepener, signaling growing expectations of rate cuts and easing monetary policy. As yield decreases, we know the price of the treasuries is increasing, displaying a rise in demand for treasuries, especially in the short term. 


US vs China Trade War: Between all the threats that Trump has stated regarding tariffs on international trade, many countries have braced for impact, but few have directly retaliated against the U.S. This week, China banned the export of critical precious metals such as [antimony, gallium, germanium]to the US that halted production of: electronics, fiber optics, semiconductors, as well as medical purposes. On this news, correlated stocks like US Antimony Corp (UAMY) jumped 144.88% over the past week. 

Global Macroeconomic News:

ADP employment: The private business labor market added 146,000 workers to their payrolls during the month of November. This change continues 3 months of strong employment, echoing strength in the US job market. Almost half of the job creation occurred in the South, with large corporations hailing most of the responsibility. This positive date is likely to influence the FOMC’s decisions in the coming months regarding their 2025 interest rate decisions. 


Initial Jobless Claims: Initial jobless claims rose to 224,000 for the week ending November 30, up from 213,000 the previous week and above market expectations of 215,000. This marks the highest reading in six weeks, but the labor market remains historically strong despite the Federal Reserve's aggressive tightening cycle. 


SEC Chair Paul Atkins & BTC: Trump announces his selection for the leader of the Securities and Exchange Commission as Paul Atkins. Atkins has commonly supported the advancement into innovative technologies such as cryptocurrencies. His stance on Bitcoin and appointment to lead helped Bitcoin finally hit the elusive threshold over $100,000. The combination of Atkins’ leadership and Bitcoin’s rise suggests a promising future for cryptocurrencies, with the potential for more widespread acceptance and regulation.

Potentially Impacted Securities: BTC, COIN


South Korean Martial Law: South Korean President Yoon Suk Yeol is facing potential impeachment after declaring martial law (temporary military control over civilian functions of government) in Seoul, sending heavily armed soldiers onto the streets and raising alarm over his actions. The National Assembly quickly voted to lift the martial law, which had lasted only six hours, and opposition parties are pushing for an impeachment vote. Yoon’s declaration of martial law, which critics call an unconstitutional power grab, has led to protests and strikes, intensifying pressure on the president. Currently, efforts to impeach President Yoon have also failed as the National Assembly diverged, posing a deeper political conflict. 

Potentially Impacted Securities: SKM, KT, KB, SHG, PKX, KEP, CPNG


Non-Farm Payrolls: U.S. non-farm payrolls increased by 227,000 in November, slightly surpassing expectations of around 200,000, indicating continued strength in the labor market despite a more cautious economic environment. . This growth is the largest % growth in the non-farm payrolls since May 2020, signals that businesses are still hiring, which may provide support for consumer spending. In addition, by just slightly over estimates, this not-too-hot job report opens up leeway for the Fed to cut rates without much concern regarding inflation in December, as well as in future periods.

Sources: Google Finance, Market Watch, CME Fedwatch, Yahoo Finance, Reuters,  GuruFocus, New York Times, YCharts, The Conference Board

Have a great week investing!

Sincerely,
Aremorph

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