Stock Market Analysis for December 4, 2024

As the market opens today, let’s analyze the significant events that have transpired over the last week and look forward to what lies ahead.

Key Events Impacting the Market

1. Federal Reserve Meeting: The Federal Reserve’s recent meeting resulted in maintaining interest rates, which brought a sigh of relief to investors worried about slowing economic growth. This contributed to a bullish sentiment in the markets, with the S&P 500 closing higher by 1.5% last week.

2. Labor Market Report: The monthly jobs report indicated that the economy added 250,000 jobs in November, surpassing expectations. The unemployment rate remained steady at 3.7%. This positive data supported optimism about consumer spending, which is crucial as we head into the holiday season.

3. Geopolitical Tensions: Rising tensions in Eastern Europe have caused fluctuations in commodity prices, particularly oil. Although prices remain higher than earlier this year, they stabilized somewhat last week, contributing to investor confidence.

Market Predictions for Next Week

As we transition into the upcoming week, several crucial events are on the horizon:

• Consumer Price Index (CPI) Report on December 10: Investors will be watching closely to gauge inflation trends. A lower-than-expected CPI could further encourage Fed policymakers to maintain an accommodative stance.
• Earnings Season for Tech Companies: Several key companies are due to report earnings, including major players like Apple and Microsoft. These reports will be critical to analyze market trends based upon actual performance in the tech sector.

Recommendations for Today

Buy

• Vanguard S&P 500 ETF (VOO): Given the recent uptick in the general market sentiment and strong economic data, VOO provides a good diversified option to capitalize on continued growth.
• Nvidia Corporation (NVDA): With the ever-increasing integration of AI across sectors, Nvidia’s performance remains robust. Analysts expect strong earnings, leaving NVDA as a favorable buy this morning.

Sell

• Exxon Mobil Corporation (XOM): With the stabilization of oil prices and potential for future price drops, it may be wise to consider taking profits or trimming positions in XOM ahead of potential downward pressure.

Conclusion

As we step into a new week, the stock market’s outlook remains cautiously optimistic, supported by solid labor data and upcoming economic reports. Investors should keep a close eye on the CPI report and earnings from tech giants which may set the tone for the rest of December. Always consider market conditions and personal risk tolerance when making investment decisions.