The S&P 500 (Index: SPX) didn’t change much during the first full trading week of December 2023. The index closed the week at 4604.37, up 0.2% from where it closed out the previous week.But the dividend futures-based model indicates investors pushed out their time horizon by a quarter toward the more distant future quarter of 2024-Q2. The change comes as positive economic news changed the expected timing of when the Federal Reserve will begin cutting interest rates in response to slowing economic conditions in 2024.The CME Group’s FedWatch Tool projects the Fed will hold the Federal Funds Rate steady in a target range of 5.25-5.50% through next April (2024-Q2), six weeks longer than it projected a week ago. Starting from 1 May (2024-Q2), investors expect deteriorating economic conditions will force the Fed to start a series of quarter point rate cuts at six-to-twelve-week intervals through the end of 2024.The latest update for the alternative futures chart confirms the trajectory of the S&P 500 is consistent with 2024-Q4 as the new focal point for investors.latest updateThe Federal Reserve’s Open Market Committee is having their final two-day meeting of 2023 this week. The announcments that come out of the meeting and the press conference that follows it on Wednesday, 13 December 2023 may well be the last major economic event of the year with market-moving potential in the U.S. The thing to watch out for is whether the Fed’s minions will say anything that alters the expectations investors have for the timing of rate cuts in 2024.With Fed officials in communication blackout mode this past week, there was little new information from that corner to influence investor expectations. On the plus side, there were fewer market moving news headlines for investors to absorb during the week that was.Monday, 4 December 2023
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Oil falls on doubts OPEC+ will make further cuts
- Explainer: What new OPEC+ oil output cuts are in place after Thursday deal
- US factory orders fall 3.6% in October
- Fed, with rates at a peak, now looks at a hold and an eventual pivot lower
- China has more space to cut reserve ratio instead of interest rates, says ex-official
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China edges towards a big bail-out
- China regulator to speed reform of smaller financial institutions
- China’s big pig breeders dig in as losses and debts mount
- BOJ’s Noguchi: Japan yet to achieve wage-driven rise in inflation
- German exports unexpectedly drop in October
Tuesday, 5 December 2023
- Oil falls to near 5-month low on OPEC+ cut doubts, demand concerns
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US job openings hit more than 2-1/2-year low as labor market cools
- Tech firms, Wall Street lead job cuts in Corporate America
- US service sector picks up in November – ISM
- Moody’s cuts China credit outlook, citing lower growth, property risks
- China’s state banks seen swapping and selling dollars for yuan – sources
- China’s Nov services activity accelerates on boost from new orders – Caixin PMI
- As Japan emerges from deflation, banks get wake-up call on interest rate swing
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Exclusive: ECB hawk Schnabel takes rate hike off table
- ECB’s Schnabel defends smaller balance sheet as debate heats up
- Fall in euro zone business activity adds to recession expectations
- Yields fall after jobs data; Nasdaq, S&P, Dow end mixed as investors take stock of rally
Wednesday, 6 December 2023
- Oil falls 4% as build in gasoline stocks fuel demand concerns
- Weak US third-quarter unit labor costs point to slowing inflation
- US regulators clamp down in bid to prevent more bank failures
- Fed to hold rates until at least July; first cut not start of stimulus wave – Reuters poll
- China’s exports slump seen slowing as pockets of demand emerge: Reuters Poll
- ECB to cut rates in Q2, earlier than thought; winter recession seen shallow: Reuters poll
Thursday, 7 December 2023
- Oil drops to 6-month low on weak economic outlook, high U.S. supply
- Dollar General tops quarterly results as more shoppers turn to its stores
- US mortgage rates fall to nearly 4-month low – Freddie Mac
- China’s exports grow for first time in 6 months in relief for factories
- BOJ chief meets premier Kishida, explains focus on wages, demand
- Alphabet soars as Wall Street cheers arrival of AI model Gemini
- AMD AI enthusiasm leads chips higher as Broadcom results await
Friday, 8 December 2023
- Oil climbs 2% but still headed for seventh weekly drop
- US November payrolls growth hurts case for early ’24 Fed cuts
- Fed pivot to interest-rate cuts seen likely to start in May
- China car sales growth speeds up in November as price war intensifies
- S&P 500 and Nasdaq notch highest closes since early 2022
The Atlanta Fed’s GDPNow tool’s estimate of real GDP growth for the current quarter of 2023-Q4 held steady at +1.2% annualized growth for a second week. This is approximately the middle of the range anticipated by the so-called “Blue Chip Consensus”, whose estimates run from a low of 0.7% to a high of 1.8%.More By This Author:Health Insurance Cost Trends Before And After The Affordable Care Act New Home Affordability In October 2023 And The Months Ahead Dividends By The Numbers In November 2023
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