Asset Management Weekly Market Commentary

Market updates for the week ending December 13, 2024

Key observations

• U.S. large-cap stocks chopped around and moved sideways over the balance of the week as breadth narrowed. Capital moved out of some of the areas that have performed best post-election in a significant way and market participants appeared eager to crowd back into the ‘Magnificent 7.’ Alphabet (Google), Amazon, Apple, Meta Platforms (Facebook), and Tesla all reached a new all-time high at some point during the week, moves likely driven to some degree by window dressing on the part of portfolio managers desiring to show clients and prospects they held some of 2024’s biggest winners at year-end.
• Participation within the S&P 500 has trailed off in recent weeks and further deterioration in breadth measures in the coming weeks, a period in which stocks typically rally, would be noteworthy and potentially sign that a pullback could be in the offing. Over 65% of S&P 500 constituents remained above their 200-day moving average at the end of last week, and so long as this metric stays above 60%, the broader market should remain on solid footing into January.
• Treasury yields rose sharply week over week as November inflation data and ramped up trade rhetoric between the U.S. and China dominated and brought sellers back into the market, serving to more than offset strong demand for 10-year Treasuries at auction mid-week.

What we're watching

• Retail Sales for November are released Tuesday with 0.4% to 0.5% month over month growth expected to be reported across various measures.
• The Federal Open Market Committee (FOMC) concludes its two-day meeting on Wednesday and is expected to lower the Fed funds rate by 25-basis points to a target range of 4.25% to 4.50%. The Committee will provide an updated Summary of Economic Projections, or dot-plot, which will provide a lens into the median Committee member’s view on the outlook for inflation and the path forward for monetary policy in the year(s) to come.
• November U.S. Personal Consumption Expenditure (PCE), the FOMC’s preferred inflation gauge, is released Friday. Headline PCE is expected to rise 0.2% month over month and 2.5% year over year during the month, versus 0.2% and 2.3% readings in October. Core PCE, which is more closely watched by the FOMC, is expected to rise 0.2% month over month and 2.9% year over year, this compares to 0.3% and 2.8% the prior month.