Christmas has finally arrived, bringing
closures for most leading exchanges, with trades set to resume on Tuesday.
While Europeans continue their celebrations, U.S. investors may aim to
kickstart the Santa rally.
The PCE index last Friday aligned with
consensus, with Core PCE at 1.9%, below the Federal Reserve's (Fed) target of
2.0%. This led investors to increase bets on interest rate cuts in March to
78.1% from 75.6%, according to the CME FedWatch Tool. Bets on further interest
rate cuts in May and June also saw an uptick.
Investors' optimism was evident in significant
capital inflows into SPDR S&P 500 ETF Trust (SPY), reporting a $39 billion
weekly inflow, the highest since 2014. However, this influx was not met with a
substantial rise in stocks, as the S&P 500 broad market index added a
modest 0.5%. A Santa rally, which formally starts five days before the New Year
(this year, on Tuesday) and lasts until January 2-3, may be anticipated. The
index could potentially surge by another 2.0-3.0% during this rally, targeting
4850-4950 points. However, a steady climb above the resistance at 4740-4760
points is a prerequisite, with the index closing last week near the 4750 points
This week's economic calendar lacks market-moving
news. Notable data, including Initial Jobless Claims and Trade Balance in the
United States, scheduled for the second half of the week, could serve as a
formal reason for the anticipated rally.
the S&P 500 index entered a territory of new all-time highs. The benchmark
is consolidating inside the resistance zone of 4740-4760 points. The next
resistance moved to 4850 points. A surpass of the 4760 points will make these
are recovering. Brent crude prices went up above the support at $74.00-76.00
per barrel close to the $80.00 per barrel mark. The nearest upside targets are
at $84.00-85.00 per barrel. Technically, the upside period for the oil prices is closing in December. In
case of a downside scenario, prices may drop below $74.00 per barrel to the
support at $65 per barrel.
are moving inside the mid-term upside formation with targets at $2000-2100 per
troy ounce that have already been met. Prices broke through the resistance at
$2100 per ounce to $2141 level and rolled backed to the nearest support is at
$2010-2030 per ounce. Prices may continue to deteriorate pushed down by a
technical weakness period that will last by mid-January potentially leading
gold prices to $1800-1850 per ounce. The fall of prices below $2010 per ounce
will put this scenario into reality.
Greenback edged lower beyond its primary correction targets at 1.08500-1.09500
against the Euro. The Dollar is moving now to the next target at 1.11500-1.12500.
The speed of this correction was set to the maximum. So, the pair may hit these
targets already this week.