Stock Market Analysis for December 14, 2024

Overview

In the early morning of December 14, 2024, we look at the stock market’s performance following a volatile week influenced by key economic data releases and geopolitical tensions. The S&P 500 experienced a slight pullback, closing down 1.2% at 4,350 on Friday. Market participants are closely watching inflation trends and the Federal Reserve’s potential interest rate movements.

Key Events Impacting the Market

1. Inflation Data: Last week, the Consumer Price Index (CPI) report indicated that inflation remains stubbornly high at 3.6%. This has led to debates about whether the Fed will opt for one more rate hike in early 2025.
2. Geopolitical Tensions: The ongoing conflict in Eastern Europe has raised concerns about energy prices, influencing sectors such as oil and natural gas. WTI crude oil prices peaked at $90 per barrel on Thursday before retreating slightly.
3. Earnings Reports: Several major retail chains reported earnings last week, with Amazon (AMZN) and Walmart (WMT) showing strong holiday season forecasts, which helped to buoy consumer sentiment.

Market Predictions for Next Week

• Focus on Fed Meeting: The Federal Reserve’s meeting scheduled for December 19 will be critical, with indications of maintaining a hawkish stance on interest rates expected to influence market sentiment.
• Retail Sales Data: The November retail sales report to be released on Monday will provide insights into consumer spending trends ahead of the holiday season.

Recommendations for Today

• Buy Recommendations:

• SPDR S&P 500 ETF Trust (SPY): With potential volatility ahead, SPY offers strategic exposure to the broader market while providing liquidity.

• Vanguard Consumer Discretionary ETF (VCR): Retail earnings suggest consumer resilience heading into 2025.

• Sell Recommendations:

• Exxon Mobil Corporation (XOM): Given the fluctuation in oil prices and geopolitical instability, it might be prudent to take profits or reduce exposure.

• Zillow Group (Z): With rising interest rates affecting the housing market, consider trimming positions in this stock.

Conclusion

The market is poised for significant movements influenced by upcoming economic data and the Fed’s stance on monetary policy. Investors should remain vigilant and adjust their portfolios based on the evolving landscape.