Green Horizons Weekly Market Report

By : Green Horizons

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Green Horizons Weekly Report

16/12/2024 – 20/12/2024

Jordan Daily – As investors focus on important economic indicators and policy changes, the approaching week of December 16–20, 2024, is expected to be a critical time for the US financial markets. Market players will be keeping a careful eye on retail sales numbers, inflation statistics, and any monetary policy cues from the Federal Reserve as year-end draws closer. The performance of the sector and corporate activities will also be highlighted, providing information on the overall state of the economy. The main topics and variables that are anticipated to affect market movements in the coming days are summarized in this report.

 

1. S&P 500 (SPX500)

Technical Analysis:

• Support Level: 5985 / 6020 / 6032 – a critical level of support where the index remained stable during the previous weeks.
• Resistance Level: 6082 / 6102 / 6125 – Breaking this mark might signal more upward momentum.
• Outlook: “This index is considered one of the most important American indices. During last week’s trading, the index moved between the 6035-6096 levels, raising concerns among some traders about its upcoming movements. These levels are among the most critical for determining its future direction. In general, breaking below the 6036 level and stabilizing clearly beneath it would lead to a corrective move toward the 5990 level. Conversely, a clear break above the 6100 level would signal the start of a new upward trend, targeting the 6185 level in the medium term.”

2. Russell 2000 (RUSS2000)

Technical Analysis:

• Support Level: 2248 / 2280 / 2320 – the support floors that are in place now.
• Resistance Level: 2375 / 2420 / 2470 – The index may exhibit upward momentum if it breaks through this barrier.
• Outlook: “The index followed a clear corrective trend during last week’s trading and remains within the corrective zone. However, these levels are considered the final stages of the correction if the index stabilizes within the 2285-2320 range, allowing it to resume its primary upward trend. On the other hand, any clear break below this range would shift the outlook to a bearish trend, signaling further downside movement in the coming period. Conversely, a decisive break and stabilization above the 2440-2470 levels would enable the index to continue its upward trajectory, targeting new highs in the medium term, ranging between 2560-2620.”

3. Dow Jons (US30)

Technical Analysis:

• Support Level: 43000 / 43650 – a solid support level currently.
• Resistance Level:  44150 / 44560 / 45030 – Crossing the threshold would validate the uptrend.
• Outlook: “The index has taken the anticipated corrective path following significant gains in recent weeks, prompting prices to move slightly lower as part of the corrective phase. Despite this, the index’s overall trend remains clearly bullish. The expected correction range lies between 43,600 and 42,900. If the price stabilizes within this strong support zone without breaking below it, the index is likely to quickly resume its upward trajectory, achieving new highs. However, any clear break below the 42,880 level, accompanied by stabilization beneath it, would alter the overall trend entirely, pushing prices downward toward the 42,100-41,700 Conversely, if the index stabilizes at the corrective support levels, it is expected to rebound and continue its ascent, targeting new highs while pausing at some of the aforementioned resistance levels.”

4. Nasdaq 100 (US100)

Technical Analysis:

• Support Level: 21000 / 21280 / 21527– a crucial support if declines occur.
• Resistance Level: 21820 / 22100 – breaking this level could signal a more upward trend.
• Outlook: “The index traded within a narrow range during last week’s sessions, reaching a new high, which in turn sparked concerns among some investors and traders. The 21,300-21,870 range is relatively tight for determining the next direction. However, as long as the index is unable to break below the 21,560 level and remains stable above it, the upward trend is likely to continue, targeting the 21,100-21,230 Conversely, any break below the aforementioned level would push prices back toward the 21,000-21,200 range.”

5. GOLD (XAUUSD)

Technical Analysis:

• Support Level: 2600 / 2620 / 2635 / 2640
• Resistance Level: 2665 / 2675 / 2695 / 2730
• Outlook: “During last week’s trading, gold prices surged to 2727 before quickly retreating to 2648, influenced by the economic data released. For this week’s movements, the price of gold is expected to be closely monitored. If gold maintains its position above the 2624 level and fails to break below it, we could see a gradual upward trend toward higher resistance levels. A clear break below the 2620-2600 range, however, could drive the price lower, possibly reaching 2570-2550. On the other hand, if gold breaks above 2675 and stays above this level, it could signal the end of the correction, leading to continued upward movement.”

Weekly News

Important market and financial events are anticipated between December 16 and December 20, 2024, which might significantly impact trading activity during this week:

Monday (December 16, 2024):

• Empire State Manufacturing Index: the Empire State industrial Index dropped to -14.5, indicating a sharp decline in industrial activity. Important metrics like shipments and new orders were negative, indicating a decline in demand and output. With fewer employees and fewer hours worked, employment also decreased. The overall picture points to continued difficulties for the industry, even though input costs have somewhat decreased.
• Flash Manufacturing PMI: The U.S. manufacturing sector continued to shrink, according to the December 2024 Flash Manufacturing PMI. The indicator had its 14th straight month of decline, improving little from November’s 46.7% to 47.4%. Employment and new orders both continued to decline, indicating persistent difficulties in important sectors like computer and electronic products. However, because of increased company confidence and the Federal Reserve’s stable interest rate policy, the production index increased and hope for a possible rebound surfaced in early 2025.
• Flash Services PMI: The declining trend in the U.S. services sector is continuing, according to the Flash Services PMI for December 2024. The indicator fell to 52.5, indicating a slowdown in the activity of the service sector, especially in terms of employment and the expansion of new businesses. The industry’s difficulties, such as cautious consumer spending and uncertainty around inflation and interest rate policies, are reflected in this fall, even if it is still over the neutral 50-mark, which indicates expansion. The downturn may affect market expectations for future economic growth, according to economists. Forecasts and economic reports offer more in-depth information.

Tuesday (December 17, 2024):

• Capacity Utilization Rate: The percentage of potential industrial production that enterprises use is anticipated to be revealed by the U.S. Capacity Utilization Rate, which is set to be released on December 17, 2024. The rate is currently 77.13%, which is below the long-term average of 80% and somewhat lower than the rate of 77.42% from the previous month. This suggests that American industries aren’t making the most of their output potential. Understanding the rate is essential to determining the productive efficiency of the economy; lesser utilization indicates that the industrial sector has untapped capacity.

 

• Industrial Production m/m: It is anticipated that U.S. industrial output will slightly increase in the December 2024 Industrial Production MoM (Month-over-Month) data, which is scheduled on December 17. Although growth is anticipated, the pace of increase is still low due to persistent difficulties in the mining, manufacturing, and utility sectors. After declining by -0.2% in November, industrial output is expected to grow by 0.1% in December. Because they affect production capacity across important industries, analysts are keeping a careful eye on the effects of changing labor markets and growing energy prices.

 

• Business Inventories m/m: An increase of around 0.13% over the previous month is anticipated in the U.S. Business Inventories report for December 2024. According to the latest statistics available, inventories were around $2.587 trillion in September 2024, a little increase from $2.584 trillion in August. This indicates a 2.24% rise from the previous year and a persistent rising trend in total inventories.
  This information is included in the “Manufacturing & Trade Inventories & Sales” report, which offers information on how inventories and sales are balanced in important areas of the American economy. The next release of the report, which is set for December 17, will keep an eye on inventory level developments and how they can affect economic expansion.

 

• NAHB Housing Market Index: the NAHB Housing Market Index (HMI) for December 2024 is expected to be released. By November 2024, the HMI had risen to 46. Compared to the previous month, when it was at 43, this indicates a notable improvement, and it is a big year-over-year gain from 34 in November 2023. Given the difficulties of recent years, the index’s increase of 6.98% from the previous month and 35.29% from the previous year indicates that the housing market is expected to continue to grow.​

Wednesday (December 18, 2024):

• Building Permits: The most recent information on building permits, which count the number of privately owned dwelling units permitted for development, is anticipated to be released by the U.S. Census Bureau on December 18, 2024. According to the latest statistics, the seasonally adjusted annual rate for October 2024 was 1.416 million, which was a 7.7% reduction from October 2023 and a 0.6% decrease from September 2024. This is consistent with a downward trend in the rate of new home approvals throughout the previous 12 months.
  In October 2024, there were 393,000 permits for structures with five or more units, compared to 968,000 permits for single-family homes, a little rise of 0.5% from September.
• Current Account: The most available data for June 2024 indicates a $275.09 billion deficit in the U.S. Current Account balance. This is more than the $219.85 billion deficit from the previous quarter and more than the $240.41 billion deficit from the previous year. Trade, investment income, and transfer payments are all included in the current account balance, which has been declining significantly in comparison to previous years. On December 18, 2024, the next update is anticipated to be made available.

 

• Housing Starts: Housing starts in the United States have been difficult as of December 2024, indicating a slowdown in the sector. The third quarter of 2024 had the lowest third-quarter performance since 2019, with housing starts down 3.5% from the third quarter of 2023. The impacts of growing interest rates and economic uncertainty are partially to blame for the downturn. In spite of this, 2024 predictions indicate a minor recovery from prior quarters, with estimated starts in the fourth quarter hitting over 1.35 million units.
  Single-family house development has also been impacted by the recession, as seen by a sharp drop in new build permits. Experts, however, are cautiously hopeful about a possible recovery in 2025, propelled by ongoing house demand and anticipated interest rate lowering.

 

• Federal Funds Rate: the U.S. Federal Reserve lowered the federal funds rate to a range of 4.50% to 4.75% as part of a recent monetary policy adjustment. This decrease comes after rate decreases in September and November of 2024. These changes are intended to fight inflation while promoting further economic expansion.
  One of the Fed’s most important tools, the federal funds rate affects interest rates on mortgages, credit cards, loans, and other financial instruments. The Fed stimulates the economy by encouraging borrowing and spending by decreasing this rate. Rate increases, on the other hand, are usually used to reduce inflation by raising the cost of borrowing.

Thursday (December 19, 2024):

• Final GDP q/q: In the third quarter of 2024, the final GDP growth estimate is expected to be released by the U.S. Bureau of Economic Analysis. It is anticipated that the quarterly growth rate would be 2.8%, which is in line with the prediction and the estimate from the last report. A thorough evaluation of the economic performance in Q3 that takes into consideration business earnings and a variety of industries will be provided by this final publication.
• Unemployment Claims: For the week, the United States recorded 231,000 new initial jobless claims, which was somewhat more than the 228,000 total from the week before. With 1.7 million ongoing claims, the figures show a solid job market notwithstanding the increase. Although this little increase in claims may indicate some weakening, the fact that overall unemployment claims are still low suggests that the labor market is still resilient.

 

• Final GDP Price Index q/q: An essential gauge of inflationary pressure in the economy is the final GDP Price Index for Q3 2024, which was published on December 19. The price change of all the commodities and services that make up GDP is measured by this index. It is essential for comprehending the state of the economy and represents total inflation. A significant increase in the index indicates higher inflation, which might have an impact on Fed policy. Insights into more general economic patterns can be gained through thorough study and historical comparisons.

 

• Philly Fed Manufacturing Index: shows a modest drop in economic activity, pointing to a difficult month for the manufacturing industry. New orders and shipments softened, despite the fact that circumstances stayed almost same. The general prognosis for the next six months was less positive, and employment figures showed some deterioration. This is a reflection of persistent worries about supply chain problems and increased expenses.

 

• Existing Home Sales: October 2024’s U.S. Existing Home Sales were 3.96 million, up 2.86% from the same month the previous year and 3.39% from the previous month. The continuous effect of rising mortgage rates on the housing market is reflected in this modest increase. The housing market is still below pre-pandemic levels, but the data shows a gradual rebound from the 2023 dip. This update indicates a modest uptick in sales activity and comes ahead of the December 19, 2024, report. However, because of ongoing difficulties with mortgage rates, home sales are anticipated to continue to be limited.

 

• CB Leading Index m/m: After falling by 0.5% in October 2024, the Conference Board Leading Economic Index (LEI) fell by 0.4% in November. Given that the LEI is intended to forecast future business conditions, this persistently negative trend suggests a possible decline in economic activity. The indicator is influenced by a number of factors, such as manufacturing activity, unemployment claims, and stock prices. A persistent decline in the LEI indicates prudence in economic projections, which may influence investment plans and result in slower economic expansion in the United States.

Friday (December 20, 2024):

• Core PCE Price Index m/m: November 2024 is predicted to see a monthly gain of 0.30% for the U.S. Core PCE Price Index, which is in line with the previous month’s reading and represents a notable increase over the 0.10% reported in November 2023. This is somewhat more than the 0.26% long-term average. With the exception of food and energy, the Core PCE Price Index tracks changes in the costs of personal consumption expenditures. A consistent result indicates that inflationary pressures are still largely unchanged, and the December 20th publication is eagerly anticipated for more information.

 

• Personal Income m/m: anticipated to show a month-over-month increase of about 0.6%. October’s personal income was $24.96 trillion, a marginal rise over $24.81 trillion the month before. In comparison to the same month last year, this indicates a rise of 5.29%. According to this monthly change, personal income has improved steadily but somewhat, which is consistent with general economic trends. Financial markets and economic projections will be impacted by the report’s insights on consumer purchasing power and economic health.

 

• Personal Spending m/m: December 2024 is expected to see a 0.3% month-over-month growth in U.S. personal spending, which is marginally less than the 0.4% gain the previous month. This information is important because it shows how customers, who make up a sizable amount of the US economy, behave while making purchases. Although the growth rate seems modest, an increase in consumer expenditure indicates confidence in the economy. With ramifications for inflation patterns and Federal Reserve policy, the report is a crucial barometer of economic momentum. Consumer-driven economic activity will be further highlighted if actual outcomes match predictions

As the week of December 16–20, 2024 draws near, attention will be drawn to a number of important economic data. The health of the manufacturing and real estate sectors will be revealed by the forthcoming statistics, which will include the Empire State Manufacturing Index, Flash PMI readings, and other housing market indicators. Furthermore, the Core PCE Price Index, Personal Income, and Personal Spending reports will offer vital data on consumer behavior and inflationary trends, which are critical for comprehending the overall state of the economy. Market sentiment will be significantly influenced by these news, especially in light of prospective Federal Reserve policy measures. Traders and investors will keep a careful eye on these events throughout the week in order to spot any indications of new threats or economic resilience.

Corporate Earning

The U.S. market may be impacted by the following business earnings reports that are scheduled to be announced during the week of December 16–20, 2024:

1. December 17, 2024 FedEx (FDX)
   FedEx’s profits will be widely watched by investors, particularly in light of global e-commerce and logistics developments. The company’s findings could shed light on the condition of global trade and the need for deliveries during the holidays.
2. December 17, 2024, Nike (NKE)
   For indications of strength or weakness in the global consumer market, namely in North America and China, Nike’s performance will be examined. Sales growth will be the main focus of investors, particularly in its important categories like clothing and footwear.
3. Oracle, December 18, 2024 (ORCL)
   For investors monitoring the expansion of the cloud computing industry, Oracle’s earnings report will be crucial. Strong success in its cloud services division will be sought after by analysts as a major source of income.
4. December 18, 2024, Accenture (ACN)
   Accenture is a well-known worldwide provider of professional services, therefore its financial results may provide light on trends in technology adoption and business consulting. We’ll keep a careful eye on how well it does in cloud services and digital transformation.
5. December 19, 2024, Micron Technology (MU)
   Micron will make a lot of money because the semiconductor sector is being scrutinized. The outlook for memory chip demand will be of particular interest to investors, particularly in relation to the production projections and inventory levels of tech companies.

Investors’ perceptions of the company’s success in the midst of economic difficulties and possible market volatility will be greatly influenced by these profits. Watch each of these businesses closely since their actions might affect more general indexes.

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Disclaimer: The information provided in this report is for informational purposes only and does not constitute financial advice, investment recommendations, or an offer to buy or sell any securities. Jordan Daily, Green Horizons, and any affiliated advertisers disclaim all liability for any decisions made based on this report. Investors should conduct their own research or consult with a licensed financial advisor before making any investment decisions.