SPX Spotlight - Monday, Dec 16, 2024: Market Sentiment Builds Before Fed Meeting
Broadcom (AVGO) lifts S&P 500, Nasdaq and Bitcoin makes new highs.
Introduction
The S&P 500 closed at a record high of 6,074.08 on Monday, gaining 0.4% in a tech-driven rally that showcased the continued dominance of the sector. Investors remained cautiously optimistic as they awaited the Federal Reserve's crucial meeting later this week, with expectations of a potential interest rate cut fueling market sentiment
Market Drivers and Economic Reports
The S&P 500's 0.4% gain on Monday was primarily driven by anticipation of the Federal Reserve's two-day meeting starting Tuesday. Investors are widely expecting another interest rate cut, which has been supporting the bullish sentiment in the market.
Key factors influencing today's market movement include:
Federal Reserve Meeting: All eyes are on the upcoming FOMC meeting, with traders expecting a 25 basis point cut in interest rates. The Fed's outlook for 2025 will be crucial in determining the market's direction.
Tech Sector Performance: Technology stocks led the charge, with the Nasdaq Composite surging 1.2% to a new all-time high of 20,173.89.
Bitcoin makes new all-time high of 107,821.
Notable Stock Movements
Several stocks played significant roles in today's market performance:
Broadcom (AVGO): Shares soared 11.2%, leading the S&P 500 higher. The chipmaker's strong performance was fueled by better-than-expected quarterly results and Bernstein analysts naming it one of their top semiconductor picks.
Tesla (TSLA): The stock jumped 6.1% to an all-time high, driven by Wedbush analysts' optimistic outlook on the company's AI and full self-driving technology potential.
Micron Technology (MU): Shares climbed 5.6% as investors anticipate strong year-over-year sales and profit growth in the company's upcoming quarterly results.
Super Micro Computer: The stock experienced a decline following its removal from the Nasdaq 100 and reports of potential capital raising plans.
Technical Analysis
Recap
Today will gap filled and sold off at the closing hour, creating a even stronger trendline. This forms a flag pattern giving us a range of where markets can go before breaking out on either sides.
Bull Case
After a weak close, there are slim chances that we hold the pivot region and maintain the green EMA band to retest the resistance zone.
With plenty of support from the EMA bands, we may end up having a false breakout of the flag pattern.
Bear Case
Coincidently, the support line and projection of 72 EMA (Sea Blue ribbon) coincides. Since we had a weaker close, we may continue the rejection and land in the support area, consolidating at 72 EMA and support level.
Market Sentiment and Key Indicators
The volatility in the market is eminent as we await Fed’s rate cut.
VIX climbing up to 15.16 to kiss its first pivotal resistance. This coincides with the 200 EMA orange ribbon as well.
Key Takeaways & What’s Next
Core retail sales before market opens.
Fed’s interest rate cuts on Wednesday.
Key SPX levels to watch out for are 6,086 and 6,060.
Closing Thoughts
With the Nasdaq making new highs and S&P 500 with a pullback, where do you think the market is heading?
What’s your take on market tomorrow? Comment below.