Stock Market Analysis for December 15, 2024

Overview

As we head into the trading week, the stock market has shown mixed results due to global economic indicators and key earnings results from several major corporations.

Weekly Recap

In the week leading to December 15, 2024, the S&P 500 closed slightly higher at 4,675 points, up 0.5%. The tech-heavy Nasdaq saw increased volatility, closing down 0.3% at 14,300 points, primarily due to disappointing earnings from some tech giants. Meanwhile, the Dow Jones Industrial Average rose 1.2% fueled by strong performances in energy and financial sectors.

Key Events Impacting the Market

1. Inflation Data: On December 12, reports showed that inflation has continued to cool, with the Consumer Price Index showing a 0.2% increase month-over-month, indicating that the Federal Reserve’s tightening measures may be taking effect. This has raised hopes of a soft landing for the economy.
2. Federal Reserve Meeting: The upcoming Federal Reserve meeting on December 19-20 will be critical. Investors are keen to hear any signals regarding interest rate hikes in 2025.
3. Geopolitical Concerns: Ongoing geopolitical tensions, especially in Europe, are leading to fluctuations in energy prices, impacting market sentiment.

Upcoming Events to Watch

• Earnings Reports: Key companies like Apple, Tesla, and Amazon are scheduled to release their quarterly earnings this week. Their performance could significantly affect the market direction.
• Retail Sales Data: Retail sales numbers for November will be released on December 17, which may give insight into consumer spending trends amid inflation concerns.
• Consumer Confidence Index: The next Consumer Confidence Index report is due on December 20, which will help gauge consumer sentiment heading into the holiday season.

Recommendations

Stocks to Buy

• XLI (Industrial Select Sector SPDR Fund): A strong pick as infrastructure spending is likely to ramp up, with many governments pushing for increased spending in public works.
• VFH (Financial Select Sector SPDR Fund): As interest rates potentially stabilize or decrease, financials could benefit from improved loan growth and higher valuation multiples.

Stocks to Sell

• Growth-oriented Tech Stocks: With potential headwinds from interest rates and a cautious outlook from major tech firms, consider trimming positions in high P/E ratio stocks until clearer direction emerges.

Keep an eye on these developments as they could dictate market movements in the upcoming week. Happy investing!