Global Macro in Focus: Market Catalysts for the Upcoming Week
WATCH THE DOLLAR!
Last Week’s Market Recap:
SPX Gains: The S&P 500 climbed ~1.5% for the week, supported by dips being met with strong buying.
Nvidia Earnings: Beat expectations but delivered modest guidance, prompting a sell-off. Despite this, stocks pushed higher without significant tech sector help. (Keep an eye on this as we are moving in to a reflationary regime, this could be the new normal)
Sector Highlights: Information Technology rose 2.5% over 20 days, but semiconductors lagged (~-1%)
Macro Trends: Optimism around the election is boosting market sentiment, while the U.S. Dollar's breakout to multi-year highs adds complexity. (Watch for a reversal)
This Week’s Outlook:
Seasonality Boost: Thanksgiving week historically trends bullish, though lighter trading volumes could increase volatility.
Economic Focus: PCE Prices (Wednesday) is the Fed’s preferred inflation measure—key for future rate expectations.
Earnings to Watch: DELL, CRWD, and WDAY report Tuesday.
Economic Data in Focus:
Stronger Services: S&P Global US Services PMI hit its highest level since March 2022 at 57.0, signaling robust activity.
Housing Recovery: Existing home sales rose 3.5% MoM, marking the first YoY gain since July 2021.
Labor Market: Initial claims hit a multi-month low (213K), while continuing claims remain elevated.
Rate & Fed Watch:
Fed cut expectations are easing. December rate cut odds fell to 55% (from 58%), far from 92% a month ago. Longer-term, the market now sees 50-75bps cuts by end-2025—a sharp drop from prior estimates of 175bps.
Bond yields showed mixed moves, with 2-year Treasuries up 6bps to 4.36% and 10-years flat at 4.41%.
Bottom Line:
Bullish seasonality, improving technicals, and a resilient economic backdrop point to continued gains.
Risks? Watch for surprises in the PCE report and any sharp rises in bond yields.
International: Performance YTD
International: Performance over the last month is showing weakness. I’ll keep an eye on this.
US SPDR Major Sectors
Global Yields
Style Factors
The Most Important Thing to Watch This Week
The Dollar Index ($DXY) closed right above the top of its range and reversed. Here’s where I stand: I still think a weaker dollar is coming, but that call flips if we see a sustained breakout above this range.
Right now? I’m neutral. This trade could go up, down, or just chop sideways. What matters most is whether we stay range-bound between 99 and 107 or start to break out.
Key Levels to Watch:
A drop to the bottom of the range could light a fire under gold, silver, and other precious metals.
A sustained breakout (3-5 days) above 107 would change the game entirely.
Stay nimble, and let the market tell you what’s next. No predictions, just levels.
Against All Odds Research
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