Markets edge lower ahead of FED day 18/12/2024

HOT stories for today

Stocks on the move:

• Quantum Computing (QUBT): Shares soared over 51% to a new 52-week high after NASA’s Goddard Space Flight Center awarded the company a prime contract to support advanced imaging and data processing using Quantum’s Dirac-3 entropy quantum optimization machine.
• SolarEdge Technologies (SEDG): The stock jumped more than 16% after Goldman Sachs upgraded it to "buy" from "sell," highlighting 2025 as a critical year for the clean energy company’s turnaround.
• Affirm Holdings (AFRM): Shares declined 2.7% after the company announced a $750 million private offering of convertible senior notes and plans to repurchase up to $300 million of its Class A common stock.
• Pfizer (PFE):  Shares rose over 4% as the biopharmaceutical company’s 2025 outlook met Wall Street expectations.

Today’s action

• Asia-Pacific markets showed mixed performance on Wednesday, following Wall Street losses and ahead of the Federal Reserve's interest rate decision. Asian investors evaluated Japan’s trade data ahead of the Bank of Japan’s upcoming policy meeting. Japan's exports rose 3.8% year-on-year in November, exceeding economists’ forecast of a 2.8% increase, while imports dropped 3.8%, significantly below the expected 1% growth. This left Japan with a trade deficit of 117.6 billion yen ($765.2 million), larger than the projected 688.9 billion yen shortfall.
• U.S. stock futures remained mostly flat Tuesday night as traders awaited the Fed’s rate decision. Futures for the Dow Jones Industrial Average edged up 57 points (0.1%), S&P 500 futures rose slightly by less than 0.1%, and Nasdaq 100 futures dipped marginally. Investors will focus on the Fed’s policy statement at 2 p.m. EST, alongside the Summary of Economic Projections and Chair Jerome Powell’s press conference for insights into future policy moves. Before markets open, earnings are expected from General Mills (GIS), Birkenstock (BIRK), and Jabil (JBL), with reports from Micron Technology (MU) and Lennar (LEN) due later in the day.

Wahtclist: MU, GIS, JBL, LEN, NVDA, SMCI, TSLA, BIRK

Bitcoin

• Bitcoin paused after surpassing $108,000 for the first time, as traders anticipated a Federal Reserve interest rate cut and evaluated optimism stemming from President-elect Donald Trump’s pro-crypto stance. The leading cryptocurrency reached $108,315 on Tuesday before retreating to $104,800 by noon Wednesday in Singapore. The total market value of digital assets approached $4 trillion during the earlier rally, according to CoinGecko data. Trump has pledged supportive regulations to position the US as a global crypto leader and floated the idea of a strategic national Bitcoin reserve. Additionally, MicroStrategy Inc.’s (MSTR) upcoming inclusion in the Nasdaq 100 Index boosted sentiment, with investors eyeing further gains for the Bitcoin-focused company.
• The Federal Reserve is expected to implement a 0.25% rate cut on Wednesday, though uncertainty remains about next year’s policy trajectory due to strong US economic growth and inflation risks tied to Trump’s broader agenda. “We expect this week’s FOMC to add to market volatility,” wrote K33 Research analysts Vetle Lunde and David Zimmerman, who noted that quieter macroeconomic weeks post-FOMC could fuel Bitcoin’s momentum during the holiday season.
  Watchlist: Bitcoin: 100 000-108 000, Ethereum: 3500-4200, Solana: 202-265

Forex

• As bulls struggle to gain momentum, EUR/USD trades sluggishly near the 1.0500 mark. The pair remains focused on US events this week, with the Federal Reserve expected to deliver its third consecutive rate cut on Wednesday, alongside other key US data releases. Limited European data leaves the focus on the US side, with EUR/USD drifting to the upper range of near-term consolidation above 1.0500 on Monday, though with weak bullish conviction.
• USD/JPY holds steady around 154.10 during early Tuesday’s Asian session as traders await interest rate decisions from the Federal Reserve and the Bank of Japan later this week. The US Composite PMI climbed to 56.6 in December’s flash estimate, up from 54.9 previously, while November US Retail Sales data is set to release Tuesday. During Thursday's meeting, the BoJ is expected to maintain its current rate policy, keeping USD/JPY trading flat as market participants stay cautious.
  Watchlist: EUR/USD: 1.0300-1.0650, USD/JPY: 149-157

Basic Materials

• Gold prices tick higher despite a slight rise in the US Dollar, following mixed PMI data. Investors anticipate the Federal Reserve's interest rate decision and economic projections on Wednesday, with a 25 bps cut widely expected. XAU/USD is trading at $2,643 during the North American session, up 0.28% on the day but below intraday highs, as markets speculate on future Fed policy amid potential inflationary pressures from Trump’s policies.
• West Texas Intermediate (WTI), the US crude oil benchmark, remains flat around $70.20 during early Tuesday’s Asian session. Weak spending data from China weighs on oil prices, while geopolitical risks help limit further declines. Traders await the Federal Reserve’s rate decision for additional market direction, as concerns over slowing global demand growth continue to pressure crude.
  Watchlist: GOLD 2530-2790, US Oil: 65.00-73.00

The TEFS Analyst team wishes you a successful day!