Stock Market Analysis for December 10, 2024

As we enter the trading week, it’s essential to look back at the significant events impacting the market recently and what lies ahead. The markets closed slightly lower last week as investors reacted to the latest U.S. Consumer Price Index (CPI) data indicating inflation remains persistent, coming in at 4.1% year-over-year, higher than expectations. This has drawn attention to the Federal Reserve’s upcoming decisions regarding interest rate adjustments.

Key Events from Last Week

• U.S. Non-Farm Payrolls: The economy added 250,000 jobs in November, slightly exceeding forecasts, indicating continued strength in the labor market.
• Fed Meeting Minutes: The latest FOMC minutes revealed discussions around potential further rate hikes to combat inflation, which unsettled investors.
• China’s Economic Data: China reported better-than-expected industrial output, but ongoing concerns about its property sector lingered, affecting global market sentiment.

Events to Watch This Week

• Upcoming CPI Data: The December CPI data will be released on Friday, which could further influence the Federal Reserve’s stance.
• Retail Sales Report: The holiday shopping season is crucial, and the retail sales figures on Thursday will provide insights into consumer spending trends.
• Earnings Reports: Some significant companies in the tech sector will report earnings, which could sway market direction.

Market Sentiment

Currently, there’s a mixed sentiment across sectors, with technology and consumer discretionary showing some resilience, while utilities and healthcare are under pressure due to higher interest rates. The S&P 500 has shown volatility but remains in a consolidation phase, and the outlook for the next week could hinge strongly on economic data.

Recommendations

Buy:

• SPY (SPDR S&P 500 ETF Trust): Consider accumulating shares if you haven’t entered this fluently recovering ETF, as it tracks broad U.S. market movements.
• AAPL (Apple Inc.): With consistent demand for tech products, Apple remains a solid choice for long-term growth. Consider a buying opportunity if shares dip.

Sell:

• T (AT&T Inc.): With rising interest rates, the telecom sector may face headwinds. It may be prudent to take profit or reduce positions in AT&T.
• XOM (ExxonMobil): Although strong in the short-term due to high oil prices, the long-term viability is undermined by renewable energy advancements.

As we prepare for the new trading week, focus on the economic data and corporate earnings reports which could provide further clarity on the market’s direction.