To The Moon

After two positive weeks in a row, the major U.S. stock indexes fell around 3% to 4%. the$DJIA(.DJI)$ fell 2.77%, the $S&P 500(.SPX)$ fell 3.37%, and the $NASDAQ(.IXIC)$ fell 3.99%.

Investors worried that recently mixed inflation data could challenge the U.S. Federal Reserve’s expectations of slowing the pace of interest-rate increases.

A Consumer Price Index report scheduled to be released on this Tuesday will show whether the recent moderation in inflation extended into November. In October, inflation rose at an annual 7.7% rate—down from 8.2% in September—and 0.4% on a month-to-month basis. Both figures were below the levels that most economists had expected.

The U.S. Federal Reserve is expected to lift its benchmark interest rate for the seventh and final time of 2022 at its next meeting ending on Wednesday. The meeting comes after Chair Jerome Powell confirmed in a recent speech that the Fed could begin to shift to smaller interest-rate increases this month to try to tame inflation. Officials approved rate hikes of three-quarters of a percentage point at each of their last four meetings.

Macro Factors to Watch

Inflation Signals: A report released on last Friday showed the prices that U.S. suppliers charge goods producers rose at a slower annual rate in November than they had in the previous month. However, on a month-to-month basis, the Producer Price Index’s 0.3% increase was slightly above economists’ consensus forecast for a 0.2% rise.

Recession fears: Officials with the World Bank and the International Monetary Fund on Friday expressed concerns about a worsening outlook for the global economy and the potential for a recession. The IMF currently forecasts global growth will slow to 2.7% in 2023, down from expectations of 3.2% this year.

China's reopening: China’s government on Wednesday eased some of the strict COVID-19 rules that have recently weighed on the world’s second-largest economy. Leading up to the announcement, a Chinese stock index rallied for five consecutive weeks in anticipation of the policy changes.

Sectors & Stocks Performances Review

Last week, All the sectors fell , with the energy sector falling the most, followed by Communication Services and consumer Cyclical, and the Utilities sector fell the least last week.

Weekly Top Gainers of$S&P 500(.SPX)$

The top 10 winners of$S&P 500(.SPX)$ are $Tesla Motors(TSLA)$ , $Netflix(NFLX)$ ,$Vornado(VNO)$ ,$Broadcom(AVGO)$ ,$Mohawk(MHK)$ ,$Edwards Lifesciences(EW)$ ,$Old Dominion Freight Lines(ODFL)$ ,$Charter(CHTR)$ ,$Lumen Technologies(LUMN)$ ,$Welltower(WELL)$

Other Markets：

Oil slick: The price of U.S. crude oil $Light Crude Oil - main 2301(CLmain)$ fell around 11% for the week to less than $72 per barrel. The latest weekly decline pushed oil prices into negative territory on a year-to-date basis, as oil ended 2022 around $75. The latest price is down nearly 23% from a recent high in early November.

Volatility reversal: An index that measures investors’ expectations of short-term U.S. stock market volatility rose around 19%, climbing for just the second week out of the past eight. In the previous week, the $Cboe Volatility Index(VIX)$ slipped to the lowest level since mid-August.

The Week Ahead: December 12-16

Monday

• Federal budget, U.S. Department of the Treasury

Tuesday

• Consumer Price Index, U.S. Bureau of Labor Statistics

Wednesday

• U.S. Federal Reserve Board concludes two-day policy meeting, Chair Jerome Powell holds press conference
• Export and import prices, U.S. Bureau of Labor Statistics

Thursday

• Retail sales, U.S. Census Bureau
• Business inventories, U.S. Census Bureau
• Industrial production and capacity utilization, U.S. Federal Reserve
• Weekly unemployment claims, U.S. Department of Labor

Friday

• No major reports scheduled

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