US market: The reaction of Wall Street amidst rising tensions in Middle East with Syria Civil War taking centre stage, and upcoming economic data like CPI inflation --- will be keenly watched during the trading week of December 9 to 13. In the current month, US market will be closed for a total of 10 days including weekends and Christmas, hence, trading in DJIA, S&P 500 and Nasdaq Composite will be opened on Monday.
US Market Holidays:
There are two major exchanges in the USA namely the New York Stock Exchange and Nasdaq. As per the two exchanges holiday list, there is only one special holiday in December and that is on December 25th due to the celebration of Christmas. Apart from that, the market will be closed on December 1st, December 14th, December 15th, December 21st, December 22nd, December 28th, and December 29th as they are weekends and these are default holidays for exchanges.
US Market Weekly Outlook:
As per Nathan Peterson, Director of Derivatives Analysis at Charles Schwab's weekly outlook note, "I mentioned the factors supporting the bullish backdrop in the opener, and it seems likely that will continue to drive the "melt-up" next week, though I recognize we may be getting close to a period where some consolidation will be needed (mentioned in the "Technical Take" section below). This leads me to believe that we could potentially encounter some digestion of gains either in the first half or the back half of the week, but I net-net still expect stocks to be higher by next Friday. "
Peterson's note further said, "Therefore, my forecast for next week is "slightly bullish", while acknowledging the potential for some modest consolidation. What could challenge my outlook? Bond yields have been coming down but if they turn back up next week perhaps this could trigger more profit-taking than the minor consolidation."
Meanwhile, Mona Mahajan a Senior Strategist at Edward Jones said, "As we head into year-end and the holiday season, investors have many reasons to cheer. The stock market has been making record highs, and bond markets still offer favorable yields. Perhaps most importantly - and underpinning the solid financial markets - is that the U.S. economy continues to grow at or above trend, with no signs of recession on the horizon."
Mona's weekly outlook note said, "Overall, the fundamental backdrop for financial markets remains intact, and the U.S. economy appears poised to achieve the elusive "soft landing" (modest slowdown but still growing at or above trend). As we look toward 2025, we would expect consumers to be supported further by lower interest rates and wage growth that exceeds inflation rates."
"Despite potential policy uncertainty and market volatility ahead, we continue to believe that pullbacks can offer opportunities for investors, especially because we don't see the economy slipping into a downturn for now," she added.
Key Potential Movers Next Week:
December 9, Monday: Wholesale Inventories Data
December 10, Tuesday: Productivity-Revised, Unit Labor Costs-Revised Data
December 11, Wednesday: Consumer Price Index (CPI), EIA Crude Oil Inventories, MBA Mortgage Applications Index, Treasury Budget Data
December 12, Thursday: Producer Price Index (PPI), EIA Natural Gas Inventories, Initial Claims, Continuing Claims Data
December 13, Friday: Export Prices ex-ag, Import Prices ex-oil data.
Earnings In Focus: Some of the key companies to be in focus next week due to their quarterly results are - Oracle Group (ORCL), MongoDB Inc. (MDB), Toll Brothers Inc. (TOL), Casey's General Stores Inc. (CASY), Vail Resorts Inc. (MTN), AutoZone Inc. (AZN), Ferguson Enterprises Inc. (FERG), Academy Sports and Outdoors Inc. (ASO), GameStop Corp. (GME), Adobe Inc. (ADBE), Nordson Corp. (NDSN), REV Group Inc. (REVG), Ciena Corp. (CIEN), Broadcom Inc. (AVGO), and Costco Wholesale Corp. (COST).
Geopolitical News:
In the geopolitical development, the war between Russia-Ukraine and Israel-Hamas-Iran continues to be at a knife edge. However, this week, the ongoing multi-sided conflict in Syria has taken a new turn, with the rebels capturing Damascus and Homs. The 24 years of rule of Bashar al-Assad and his party have come to an end. Assad has fled with reports stating that he might have died in a plane crash as the aeroplane was lost from the radar. Another report said he has sought asylum in Russia with his family.
A Reuters report stated that Syria rebel fighters raced into Damascus unopposed on Sunday, overthrowing President Bashar al-Assad and ending nearly six decades of his family's iron-fisted rule after a lightning advance that reversed the course of a 13-year civil war. In one of the most consequential turning points in the Middle East for generations, the fall of Assad's government wiped out a bastion from which Iran and Russia exercised influence across the Arab world. Moscow gave him and his family asylum.
US Market Last Week:
As per Trading Economics data, the S&P 500 and Nasdaq set new record highs on Friday, up 0.2% and 0.8% respectively, fueled by a stronger-than-expected November jobs report that raised optimism about a Federal Reserve rate cut later this month. Nonfarm payrolls surged by 227K, above the forecast of 214K, recovering from the weather and strike disruptions seen in October.
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