Last Week's Recap
The US Market - $.SPX(.SPX)$ and $Dow Chemical(DOW)$ declined
The benchmark index slid 0.64% last week to end a three-week winning streak, while the Dow posted a 1.8% decline and fell for seven consecutive days. However, the tech-heavy $.IXIC(.IXIC)$ secured its fourth consecutive week of gains.
Two big inflation reports sealed the deal for a Fed rate cut on December FOMC, even as some results pointed to a stronger growth backdrop. The headline CPI rose 2.7% yoy and core CPI rose 3.3% yoy, both met the expectations. The overall PPI rose 3% from the year prior, above what economists had projected. And the Core PPI was also upward revised.
“Alternating tactical rotations between large caps and SMID caps appears to be a developing short-term theme within the context of the broadening process,” according to Piper Sandler chief market technician Craig Johnson. “Use ‘healthy’ pullbacks that confirm support to add to positions.”
The US Sectors & Stocks - $Broadcom(AVGO)$ joined $1 trillion market cap
$Apple(AAPL)$ 、 $Tesla Motors(TSLA)$ 、 $Meta Platforms, Inc.(META)$ 、 $Amazon.com(AMZN)$ and $Alphabet(GOOG)$ touched new all-time highs during the week.
$Broadcom(AVGO)$ surged more than 24% and reached a more than $1 trillion market capitalization on Friday, after surging AI demand and revenue supported a fourth-quarter beat on the top and bottom lines. CEO Hock Tan said Broadcom is developing custom AI chips with three large cloud customers, also driving investor enthusiasm.
$MicroStrategy(MSTR)$ will be joining the Nasdaq 100 index, effective Dec. 23. MSTR shares have soared more than 500% in 2024. Otherwise, $Palantir Technologies Inc.(PLTR)$ and $Axon Enterprise, Inc.(AXON)$ will also be joining the Nasdaq 100 later this month. The index ETF, including the popular Invesco QQQ Trust, will become automatic buyers of the stocks. $Illumina(ILMN)$ , $MARA Holdings(MARA)$ and $SUPER MICRO COMPUTER INC(SMCI)$ will be removed from the index.
Google-parent Alphabet $Alphabet(GOOGL)$ unveiled a breakthrough quantum computing chip, Willow, and then its latest AI tool, Gemini 2.0. That comes amid optimism about the self-driving Waymo ride-hailing business as well as YouTube advertising. GOOGL surged 8.65% for the week.
$Tesla Motors(TSLA)$ continued its huge run postelection, clearing the prior record high of 414.50 set in November 2021. Its stock rallied 12% to a record high of $436.30. Tesla sold 21,900 electric vehicles in China in the first week of December, the highest weekly sales in the fourth quarter of 2024. Tesla Cybertruck received homologation of energy consumption in China.
$Adobe(ADBE)$ handily beat fiscal Q4 expectations, with EPS up 13% and revenue 11%. But its 2025 sales and earnings guidance was below views as Adobe is taking longer than expected to monetize its AI tools for content creation and digital marketing. ADBE tumbled over 15%.
$Oracle(ORCL)$ stock fell nearly 10% after it reported below-expectations revenues for its fiscal Q2.
$Costco(COST)$ earnings rose 10%, comfortably beating, while revenue climbed 8% to $62.15 billion, meeting the forecasts. COST stock price broke out $1000.
$Walgreens Boots Alliance(WBA)$ soared 21% last week on the heels of a media report that said the pharmacy chain was in talks to sell itself to a private-equity firm.
Hong Kong Market - $HSI(HSI)$ turned lower after a positive open
Hong Kong stocks rose in the early of week, as investors awaited details from a key Chinese policy meeting. However, the benchmark staged its largest drop in a month on Friday, driving the benchmark below the 20,000-point mark, after a readout from a key Chinese economic policy meeting failed to satisfy investors. The Hang Seng Index (HSI) weekly gained 0.53%.
China’s economic work conference is expected to conclude on Thursday, which will be followed by a statement published by the Xinhua News Agency. Just days ago, a readout from a Politburo meeting chaired by President Xi Jinping said China would use “more proactive fiscal policies” to improve domestic demand in 2025 with “moderately loose” monetary tools, indicating an inclination toward broad-based stimulus.
Singapore Market - $STI.SI(STI.SI)$ was up 0.37%
Singapore stocks rose this week, with the STI up 0.37% as China pledged further monetary easing to brace itself for more trade tensions with the United States.
Singapore's economy will grow 3.6% this year, up from a previous forecast of 2.6% expansion, while monetary policy settings are expected to remain unchanged at an upcoming review in January.
Resident employment in Singapore rose by 4,000 in the third quarter of 2024, reversing from a seasonal decline in Q2, driven by strong hiring in outward-oriented sectors such as information and communications, professional services and financial services.
Australian Market - $S&P/ASX 200(XJO.AU)$ lost 1.5%
Australia’s share market fell to a one-month low after investors ran out of patience with Chinese promises to stimulate their faltering economy. That led to weakness among the miners, with even a rise in the gold price resulting in steep falls in the price of gold miners.
The ASX 200 closed down 1.5% to 8296 points for the week, the biggest since early August and falling to its lowest level for four weeks.
The Week Ahead
US Market Insights (16-20 Dec): Bracing for a Santa Claus Rally
Macro Factors - The final FOMC
The main draw of this week is the FOMC decision at 2:00 p.m. ET on Wednesday. Investors widely expected that the Fed would lower the benchmark interest rate by 25 basis points, and investors are likely to focus on what Fed Chair Jerome Powell says about the path forward in 2025 during his press conference at 2:30 p.m. ET on Wednesday.
However, given recent data that showed the US economy is growing at a solid pace, the labor market isn't rapidly cooling, and inflation's path to the Fed's 2% goal is proving bumpy, many expect the Fed will cut rates by less than initially thought in 2025.
Key to watch is the Fed's latest Summary of Economic Projections (SEP). That includes its "dot plot," which maps out policymakers' expectations for where interest rates could be headed in the future.
Updates on November retail sales, the Personal Consumption Expenditures (PCE) index — the Fed's preferred inflation gauge — and activity in the services and manufacturing sectors are also on the economic calendar.
The founder and managing partner of Fairlead Strategies Katie Stockton sees a strong finish to the year before a likely correction in the first quarter of 2025.
In corporate news, quarterly results from $Micron Technology(MU)$ , $Nike(NKE)$ , $FedEx(FDX)$ and $Carnival(CCL)$ are expected.
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