Stocks Pause Rally Ahead of Key Inflation Data: Market Summary:
Stocks pulled back following a rally that positioned the market for its strongest year since 2019,
Investors await critical inflation data that shapes expectations for Federal Reserve rate decisions.
The S&P 500 declined from near-overbought levels after reaching a string of all-time highs.
Nvidia shares dropped as China investigated potential antitrust violations by the US chipmaker related to a 2020 deal.
Meanwhile, Chinese stocks listed in the US surged sharply after Beijing’s
leadership signaled monetary easing and efforts to boost domestic consumption.

Content

Inflation Data Anticipation

Market Performance

Currency and Cryptocurrency Movements

Future Market Outlook

Hedge Fund Activity

Investor Sentiment

Conclusion

Inflation Data Anticipation

Inflation figures, including Wednesday’s Consumer Price Index (CPI),
will give Federal Reserve officials a final glimpse of the pricing environment ahead of their meeting.
A slowdown in inflation could diminish the likelihood of a third consecutive rate cut.

“This week’s inflation report may be pivotal for the Fed’s next move,”
said Jay Woods from Freedom Capital Markets.
“So far, results have matched expectations and haven’t unsettled markets.
However, a surprise increase could prompt the Fed to delay further rate cuts.”
Chris Larkin from E*Trade emphasized that only a significant rise in CPI could halt a rate cut in December.

Market Performance

The S&P 500 fell 0.6%.

The Nasdaq 100 slid 0.8%.

The Dow Jones Industrial Average lost 0.5%.

Oil climbed 1.4% to $68.13 per barrel.

Gold increased 0.9% to $2,658.02 an ounce.

Currency and Cryptocurrency Movements

The euro fell 0.2% to $1.0551.

The British pound remained steady at $1.2749.

The Japanese yen weakened 0.8% to 151.19 per dollar.

Bitcoin dropped 3.9% to $96,179.07.

Ether fell 6.3% to $3,741.5.

Future Market Outlook

According to Oppenheimer Asset Management, the S&P 500 could extend its rally to 7,100 by the end of next year,
supported by a robust economy.
Citigroup strategists predict moderate single-digit gains
for the index in 2025 amid increasing volatility driven by AI advancements,
political developments, and a soft US economic landing.

Hedge Fund Activity

According to Goldman Sachs data, hedge funds were net buyers of US equities for the first time in four weeks,
primarily focusing on macro products like indices and ETFs.
Individual stocks saw modest net buying, with IT stocks experiencing the fastest buying pace in seven weeks.
However, the industrial sector was the most sold, with short-selling volumes hitting a two-year high.

Investor Sentiment

RBC Capital Markets strategists reported a slight dip in equity futures positions,
while some investors anticipate a significant market pullback.
Deutsche Bank strategists highlighted elevated but not extreme exposure to stocks,
particularly in mega-cap growth and tech sectors.

Conclusion

Post-election momentum and seasonal trends suggest US equities could sustain gains into the new year,
continuing their strong fall performance.
Since 1930, stronger-than-average returns in November and December
have typically led to a 3% gain in the first quarter of the following year.

Stocks Pause Rally Ahead of Key Inflation Data

Stocks Pause Rally Ahead of Key Inflation Data

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