December 10, 2024

Markets:

Stock futures hovered near the flatline on Tuesday, after the S&P 500 and Nasdaq Composite pulled back from record highs.

While stocks are faltering, they are still holding not far off record highs as investors wait for Wednesday's update on consumer prices. Hopes are that the November inflation reading will provide further evidence of a "soft landing" for the economy, justifying widespread bets on a Federal Reserve rate cut in December.

The U.S. Federal Reserve will cut interest rates by 25 basis points on Dec. 18, according to 90% of economists polled by Reuters, with most expecting a pause in late January amid concerns about rising inflation risks.

The Fed is currently on a mission to get the funds rate down to neutral, which neither restricts nor stimulates the economy. Its most recent assessment of that rate is around 2.9%.

The Fed will publish its latest set of quarterly forecasts at the December meeting.

Portfolio:

We enter the new trading session holding setups in PSQH, ACHR, IREN, HOOD, and TEVA.   As soon as the open came yesterday, we had a tun but it was with very low volume.  It seems traders are waiting for tomorrows data reports.  But so many new set-ups are emerging.  U.S. economic indicators continued to reflect resilience. Slightly mixed employment data, strong construction spending, and healthy job openings underscored a growth picture that investors remain comfortable with. Market participants also noted Europe’s upcoming industrial production data as a global growth indicator.

Although breadth slightly narrowed yesterday, with fewer stocks above their 200-day SMAs, participation remains sufficiently broad. While the rally may be getting more selective, it’s not signaling imminent deterioration. Most sectors and size segments still show enough strength to keep the overall trend intact.

We remain patient here, getting ready to attack but might need CPI tomorrow to fully ignite.  Just stay patient there.  The greatest rewards come after these data points for us.