As the year draws to a close, Wall Street is experiencing a modest pullback, with investors locking in profits from a robust fourth quarter. Here’s what’s shaping the markets this week and how OptionsPlayers members can stay ahead.
1. Federal Reserve in Focus: Rate Cuts on the Horizon?
The Federal Reserve has cut rates by a full percentage point since September, including a 25-basis-point reduction earlier this month. However, projections for 2025 suggest a more cautious approach, with only two cuts expected next year instead of the previously anticipated four.
Key insights:
- Core PCE Inflation: Expected to hit 2.5% by early 2025, still above the Fed’s 2% target.
- Goldman Sachs Forecast: Predicts the next Fed rate cut in March 2025, followed by cuts in June and September.
- Geopolitical Risks: Tariffs, tax cuts, and policy shifts under the incoming administration could impact these forecasts.
Upcoming data like weekly jobless claims and ISM Manufacturing PMI will provide more clarity on the Fed’s next moves.
2. US Stock Futures Edge Lower
Investors are taking profits as the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite approach record highs for the year:
- S&P 500 Futures: Down 0.2%.
- Dow Futures: Dropped 85 points, or 0.2%.
- Nasdaq 100 Futures: Fell by 40 points, or 0.2%.
Despite the dip, 2024 has been a stellar year for equities, with the Nasdaq up over 31%, marking its best year since 2021.
3. Japan’s Manufacturing PMI Sees Recovery Signs
Japan’s factory activity showed improvement in December, with the au Jibun Bank Japan Manufacturing PMI rising to 49.6, signaling stabilization after months of contraction.
The Bank of Japan kept rates steady earlier this month, but signs of economic recovery may lead to an imminent rate hike in early 2025.
4. Bitcoin Retreats but Remains a Long-Term Bet
Bitcoin has pulled back from its December high of $108,379.28, falling 1.6% to $93,817. However, its 120% gain this year underscores its long-term growth potential.
According to Dan Morehead of Pantera Capital:
- Bitcoin’s market cap could hit $15 billion by 2028, a 10,000% increase.
- The number of users could grow from 300 million to 5 billion within a decade.
For OptionsPlayers members, Bitcoin remains a key asset to watch as it reshapes the financial landscape.
5. Oil Prices Dip Amid Thin Holiday Trade
Crude oil prices slipped Monday, with WTI down 1.5% and Brent falling over 4% for the year. The decline stems from slowing demand in China, the world’s largest oil importer.
However, China’s PMI factory surveys on Tuesday may provide new insights into the strength of its economic recovery.
6. NQ Technical Analysis: Key Levels to Watch
The Nasdaq futures market continues to trade around pivotal levels:
- Upside Targets: 22,100 and 22,400.
- Downside Targets: 21,300 and 21,000.
The key focus is on 21,700—a level buyers reclaimed last week. If it holds, it could set the stage for further upside. Weakness below this level, however, may invite sellers to drive prices lower.
OptionsPlayers Strategy: Stay Ready for the Final Push
- Last Week Recap: Puts on AAPL and WMT delivered strong returns.
- Today’s Outlook: Buyers may step into TSLA. Keep your plans sharp in these final days of 2024 to optimize gains and minimize tax exposure. If you want to get the plays of the day then signup for Gold, and get a FREE TRIAL
Reminder: Markets close early on Wednesday for the holiday, so activity may be light. Stay prepared and disciplined to end the year on a high note.
If you want to get the plays of the day then signup for Gold, and get a FREE TRIAL
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