OP Wire 12/18 (OP – Lite)

By Steve

Markets are looking to rebound as U.S. stock index futures climbed Wednesday morning, reversing Tuesday’s losses ahead of the Federal Reserve’s much-anticipated interest rate decision. While a 25-basis point cut is almost certain, the focus will be on long-term rate guidance and economic projections for 2025.

📊 Futures Rebound After Wall Street Decline

S&P 500 Futures rose 0.27% to 6,143.75 points.
Nasdaq 100 Futures added 0.23% to 22,365.25 points.
Dow Jones Futures climbed to 44,083.00 points after the Dow experienced its ninth consecutive daily decline on Tuesday, marking its longest losing streak since 1978.

🕒 Fed Rate Cut and Projections

The Federal Reserve is widely expected to deliver a 25-basis point rate cut today, marking its third consecutive cut. However, investor attention will shift to:

Fed’s economic projections for 2025: Persistent inflation and a robust labor market could influence the Fed’s ability to cut rates further.
Comments from Chair Jerome Powell: Traders will parse his statements for any clues on the Fed’s strategy, especially regarding potential rate movements in January.

📈 Retail Sales Data Beat Expectations

November retail sales data showed a 0.7% monthly increase, exceeding the 0.5% forecast.

The growth highlights resilient consumer spending driven by a strong labor market and steady household finances, despite ongoing inflation concerns.

📉 Tech Sector Dragged Wall Street

Wall Street saw mixed results on Tuesday:

S&P 500: Fell 0.4% to 6,050.61 points.
NASDAQ Composite: Dropped 0.3% to 20,108.30 points.
Dow Jones Industrial Average: Closed 0.6% lower at 43,449.90 points.

Tech sector standouts included:

NVIDIA (NASDAQ:NVDA): Dropped 1.2% due to concerns over U.S.-China tech tensions.
Alphabet (NASDAQ:GOOG): Slipped 0.5%.

💡 BlackRock Highlights Bitcoin and Gold as Key Diversifiers

BlackRock’s “2025 Global Outlook” emphasizes the growing appeal of Bitcoin and gold as portfolio diversifiers:

Bitcoin: Offers unique value drivers, including a fixed supply and potential for broader adoption as a payment system. BlackRock sees Bitcoin as a potential hedge against equity sell-offs, given its limited correlation with major risk assets.
Gold: Continues to serve as a reliable inflation hedge, with central banks increasing reserves amid geopolitical tensions.

📉 Oil Retreats

Crude prices dipped ahead of the Fed meeting:

WTI Crude Futures fell 1.5% to $69.64 a barrel.
Brent Crude dropped 0.8% to $73.31 a barrel.

Weaker-than-expected Chinese retail sales data earlier this week and pre-Fed caution are contributing to this pullback.

📅 Don’t Miss Tomorrow’s Free Live Trading Session!

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💼 Key Takeaways for Traders

Focus on Fed Guidance: A rate cut is expected, but watch Powell’s comments for insight into the January meeting and 2025 outlook.
Retail Strength: Strong retail sales data reflects economic resilience despite challenges.
Tech Sector Volatility: Stay cautious with tech stocks like NVDA and GOOG, given their sensitivity to macroeconomic shifts.
Opportunities in Gold and Bitcoin: Consider these assets as potential hedges amid market uncertainty.

See you in chat for more analysis and insights! Let’s end the year strong and Stack Your Gains!

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