Quiver Quantitative - As Wall Street braces for a crucial week filled with key economic data and central bank meetings, traders are exhibiting a cautious stance, avoiding large-scale bets. The imminent release of the November Consumer Price Index (CPI) report and the Federal Reserve's final decision of 2023 are pivotal events that have the potential to shape market sentiment and strategies going into 2024. This week's outcomes are especially significant as they will offer insights into whether the Fed will temper expectations of policy easing, following a recent shift towards a dovish stance by investors.
Craig Erlam, an analyst at Oanda, highlights the importance of the upcoming days, which could determine the market's trajectory at the year's end and into the next. While the Fed's decision is not expected to be controversial, the accompanying forecasts, dot plot, and press conference could provide critical cues.
UBS (UBS) Private Wealth Management's Greg Marcus notes that the recent strength in stocks is largely based on expectations of a soft landing and rate cuts in 2024. However, he cautions that if rate cuts are prompted by a slowing economy, market dynamics could shift significantly.
Market Overview: -US consumers' near-term inflation expectations dropped to their lowest since April 2021. -Growing speculation of Fed rate cuts in 2024 fueled a recent market rally. -Investor concerns remain high ahead of CPI data and Fed decision. -US stocks are expected to outperform global peers in 2024.
Market Overview: -Consumer Price Index (CPI) data is due Tuesday, followed by the Fed decision Wednesday. -Fed may try to temper easing expectations despite dovish repricing by investors. -S&P 500 (SPY (NYSE:SPY)) expected to reach a record high in 2024, avoiding recession. -Goldman Sachs (GS) sees US growth stocks outperforming value peers next year. -Several major corporate deals announced, including Macy's (NYSE:M) buyout offer and Occidental (NYSE:OXY)-CrownRock acquisition.
Market Overview: -This week's data and decisions will be crucial for market direction in the coming months. -Investors are watching for signs of continued disinflation and Fed policy stance. -A volatile week is expected as key events unfold.
The S&P 500's fluctuation around the 4,600 mark, coupled with pressures on big tech firms like Nvidia (NVDA) and Apple (NASDAQ:AAPL), reflects this uncertainty. Meanwhile, Treasury yields, and the dollar are experiencing upward movements, indicating a mixed sentiment in the market. The drop in U.S. consumers' near-term inflation expectations adds another layer to the complex market outlook. While growing speculation suggests that the Fed may halt rate hikes and start easing by mid-2024, fueling a recent surge in risk appetite, traders remain wary of the week ahead.
This article was originally published on Quiver Quantitative