Expectations of a pause in interest rate cuts next year have caused a setback for US stocks. This week, attention is focused on the Federal Reserve's interest rate meeting
According to reports, last week the S&P 500 halted its three-week winning streak, falling 0.64% for the week; the Dow Jones dropped 1.82%, marking its seventh consecutive trading day decline; while the Nasdaq rose 0.34%, breaking the 20,000 point mark for the first time. Bitcoin surged back above $100,000 last week, recording its longest seven-week winning streak since 2021. The altcoin market cooled down with a significant pullback overall. Bitcoin ETFs saw a net inflow of $2.115 billion for the week, with Ethereum ETFs receiving about $712.7 million, and stablecoin supply increased by $2.1 billion, indicating continued bullish sentiment from investors.
As of this writing, Bitcoin has surged, breaking its historical high to reach $106,648, with the top ten cryptocurrencies experiencing gains ranging from 1% to 4%. In the forex and commodities markets, the U.S. Dollar Index was strong, breaking above 107 and maintaining a two-week high on Friday, while non-U.S. currencies generally fell over the week. Global oil prices saw a substantial rise last week driven by geopolitical tensions, and with expectations of an imminent Fed rate cut next week, spot gold rose 0.56% for the week.
This week's most anticipated economic event is the Federal Reserve's FOMC meeting on Wednesday, followed by the rate decision and quarterly economic projections on Thursday. Market expectations for a 25 basis point rate cut in December have been fully priced in, and there is anticipation that rate cuts next year will be more cautious and gradual, possibly even pausing in January. Additionally, this week marks the final “super central bank week” of 2024, with up to 25 central banks, including those from Japan, the UK, and Sweden, discussing interest rates in the same week, which could trigger significant market volatility, especially in the around-the-clock forex and commodities markets.
