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Dec 13, 2024

U.S. Stocks Await Fed's Rate Cut Guidance Amid Historic Nasdaq Surge

In a banner year for U.S. stocks, the upcoming Federal Reserve meeting stands as one of the final major challenges, as investors eagerly await the central bank's guidance on interest rate cuts. According to Reuters, the Nasdaq Composite index achieved a historic feat by breaching the 20,000 mark for the first time ever in the past week, contributing to its remarkable 32% gain this year alongside a 27% rise for the S&P 500.

Market Reactions and Expectations

The surge in stocks has been buoyed by expectations that the Federal Reserve will continue to cut interest rates, a move anticipated to reduce borrowing costs further by 25 basis points next week. Despite these gains, market participants have tempered their expectations for an aggressive rate-cutting strategy next year due to persistent inflation and robust economic growth.

Benchmark U.S. 10-year Treasury yields have climbed to a three-week high of 4.38%, impacting Treasury prices inversely. Investors are wary as the yield approaches the 4.5% threshold, which could signal potential market instability. As Jim Baird from Plante Moran Financial Advisors noted, any signs that the Fed might adopt a slower approach than anticipated could introduce some downward pressure on stocks.

Impact of Fed's Decisions on Investments

The Fed's stance on monetary policy is critical for determining borrowing costs and stock valuations, influencing both equities and bond yields. The anticipated Fed fund futures show a 96% likelihood of a 25 basis point reduction upon the Fed's policy announcement, based on CME FedWatch data from last Friday. However, projections for rates next year remain uncertain, with Fed fund futures suggesting a rate of 3.8% by next December, contrasting from the current 4.5%-4.75% range.

The Fed's economic projections, last updated in September with a median rate prediction of 3.4% for the next year's end, will be closely scrutinized. Fed Chair Jerome Powell's remarks hint at a potentially stronger economy than earlier anticipated, signaling possible caution in cutting rates further. Additionally, the upcoming presidential election, with Trump's pro-growth policies, adds another layer of complexity to potential inflationary pressures next year.

Market Outlook and Investor Sentiment

Market analysts, such as those from BNP Paribas, expect a "hawkish cut" with possibilities for a pause in future rate reductions, reflecting the Fed's vigilance on inflation concerns. Data from November reveal a slowdown in achieving the Fed's 2% inflation target, but the bullish sentiment among investors might continue to drive gains towards the year's end.

IndexBox market data also indicates strong tech-sector performance, yet some caution that the rally may be overextended, with fewer Nasdaq stocks reaching 52-week highs since the post-election surge. According to Adam Turnquist from LPL Financial, the tech-heavy Nasdaq may experience a short-term pause before resuming its longer-term momentum.

Source: IndexBox Market Intelligence Platform

  1. 1. INTRODUCTION

    Making Data-Driven Decisions to Grow Your Business

    1. REPORT DESCRIPTION
    2. RESEARCH METHODOLOGY AND AI PLATFORM
    3. DATA-DRIVEN DECISIONS FOR YOUR BUSINESS
    4. GLOSSARY AND SPECIFIC TERMS

  2. 2. EXECUTIVE SUMMARY

    A Quick Overview of Market Performance

    1. KEY FINDINGS
    2. MARKET TRENDS This Chapter is Available Only for the Professional Edition PRO

  3. 3. MARKET OVERVIEW

    Understanding the Current State of The Market and Its Prospects

    1. MARKET SIZE
    2. CONSUMPTION BY COUNTRY
    3. MARKET FORECAST TO 2030

  4. 4. MOST PROMISING PRODUCT

    Finding New Products to Diversify Your Business

    This Chapter is Available Only for the Professional Edition PRO
    1. TOP PRODUCTS TO DIVERSIFY YOUR BUSINESS
    2. BEST-SELLING PRODUCTS
    3. MOST CONSUMED PRODUCT
    4. MOST TRADED PRODUCT
    5. MOST PROFITABLE PRODUCT FOR EXPORT

  5. 5. MOST PROMISING SUPPLYING COUNTRIES

    Choosing the Best Countries to Establish Your Sustainable Supply Chain

    This Chapter is Available Only for the Professional Edition PRO
    1. TOP COUNTRIES TO SOURCE YOUR PRODUCT
    2. TOP PRODUCING COUNTRIES
    3. TOP EXPORTING COUNTRIES
    4. LOW-COST EXPORTING COUNTRIES

  6. 6. MOST PROMISING OVERSEAS MARKETS

    Choosing the Best Countries to Boost Your Exports

    This Chapter is Available Only for the Professional Edition PRO
    1. TOP OVERSEAS MARKETS FOR EXPORTING YOUR PRODUCT
    2. TOP CONSUMING MARKETS
    3. UNSATURATED MARKETS
    4. TOP IMPORTING MARKETS
    5. MOST PROFITABLE MARKETS

  7. 7. GLOBAL PRODUCTION

    The Latest Trends and Insights into The Industry

    1. PRODUCTION VOLUME AND VALUE
    2. PRODUCTION BY COUNTRY

  8. 8. GLOBAL IMPORTS

    The Largest Importers on The Market and How They Succeed

    1. IMPORTS FROM 2012–2024
    2. IMPORTS BY COUNTRY
    3. IMPORT PRICES BY COUNTRY

  9. 9. GLOBAL EXPORTS

    The Largest Exporters on The Market and How They Succeed

    1. EXPORTS FROM 2012–2024
    2. EXPORTS BY COUNTRY
    3. EXPORT PRICES BY COUNTRY

  10. 10. PROFILES OF MAJOR PRODUCERS

    The Largest Producers on The Market and Their Profiles

    This Chapter is Available Only for the Professional Edition PRO

  11. 11. COUNTRY PROFILES

    The Largest Markets And Their Profiles

    This Chapter is Available Only for the Professional Edition PRO
    • United States
    • China
    • Japan
    • Germany
    • United Kingdom
    • France
    • Brazil
    • Italy
    • Russian Federation
    • India
    • Canada
    • Australia
    • Republic of Korea
    • Spain
    • Mexico
    • Indonesia
    • Netherlands
    • Turkey
    • Saudi Arabia
    • Switzerland
    • Sweden
    • Nigeria
    • Poland
    • Belgium
    • Argentina
    • Norway
    • Austria
    • Thailand
    • United Arab Emirates
    • Colombia
    • Denmark
    • South Africa
    • Malaysia
    • Israel
    • Singapore
    • Egypt
    • Philippines
    • Finland
    • Chile
    • Ireland
    • Pakistan
    • Greece
    • Portugal
    • Kazakhstan
    • Algeria
    • Czech Republic
    • Qatar
    • Peru
    • Romania
    • Vietnam

  12. LIST OF TABLES

    1. Key Findings In 2024
    2. Market Volume, In Physical Terms, 2012–2024
    3. Market Value, 2012–2024
    4. Per Capita Consumption, By Country, 2018–2024
    5. Production, In Physical Terms, By Country, 2012–2024
    6. Imports, In Physical Terms, By Country, 2012–2024
    7. Imports, In Value Terms, By Country, 2012–2024
    8. Import Prices, By Country Of Destination, 2012–2024
    9. Exports, In Physical Terms, By Country, 2012–2024
    10. Exports, In Value Terms, By Country, 2012–2024
    11. Export Prices, By Country Of Origin, 2012–2024

  13. LIST OF FIGURES

    1. Market Volume, In Physical Terms, 2012–2024
    2. Market Value, 2012–2024
    3. Consumption, By Country, 2024
    4. Market Volume Forecast to 2030
    5. Market Value Forecast to 2030
    6. Products: Market Size And Growth, By Type
    7. Products: Average Per Capita Consumption, By Type
    8. Products: Exports And Growth, By Type
    9. Products: Export Prices And Growth, By Type
    10. Production Volume And Growth
    11. Exports And Growth
    12. Export Prices And Growth
    13. Market Size And Growth
    14. Per Capita Consumption
    15. Imports And Growth
    16. Import Prices
    17. Production, In Physical Terms, 2012–2024
    18. Production, In Value Terms, 2012–2024
    19. Production, By Country, 2024
    20. Production, In Physical Terms, By Country, 2012–2024
    21. Imports, In Physical Terms, 2012–2024
    22. Imports, In Value Terms, 2012–2024
    23. Imports, In Physical Terms, By Country, 2024
    24. Imports, In Physical Terms, By Country, 2012–2024
    25. Imports, In Value Terms, By Country, 2012–2024
    26. Import Prices, By Country, 2012–2024
    27. Exports, In Physical Terms, 2012–2024
    28. Exports, In Value Terms, 2012–2024
    29. Exports, In Physical Terms, By Country, 2024
    30. Exports, In Physical Terms, By Country, 2012–2024
    31. Exports, In Value Terms, By Country, 2012–2024
    32. Export Prices, 2012–2024

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