Weekly Market Outlook: PMI Data and Liquidity Boosts Drive Markets
US equities had a bit of a rollercoaster ride this week, especially with tech and growth stocks all over the place. The Santa Rally ended on a high note with some small gains – promising, but not exactly record-breaking.
The Japanese Yen got a boost thanks to some potential changes in Bank of Japan policies, while the US Dollar kept on chugging ahead. There’s a lot riding on Chinese PMI data and US manufacturing PMI next week, with hopes for signs of economic recovery.
Over on Wall Street, Friday saw a bit of a dip due to tech and growth stock woes. Some heavy hitters like Nvidia, Tesla, and Microsoft took a hit, causing most S&P sectors to drop. Information technology and consumer discretionary sectors felt it the most, despite doing well this year.
The US Dollar Index kept on its upward path, aiming for some gains. Meanwhile, EUR/USD and GBP/USD held steady with minor losses. The Japanese Yen had a comeback from its recent slump against the dollar, partially due to murmurs about a possible rate hike from the Bank of Japan.
Oil prices picked up a bit, possibly due to lower US crude stockpiles and hopes for a recovery in China. Gold prices had a mixed week, with a slight rise followed by a drop, but there’s still some support due to uncertainties in 2025.
Looking ahead, there’s not much data coming out of the Asia Pacific region next week. The big ticket item will be Chinese PMI data, which could have ripple effects in various markets, especially for commodities.
In developed markets, the US is the big player next week, with the manufacturing PMI data release being the highlight. Expectations are high for the US economy in 2025 under the new administration.
As we close out the year, all eyes are on the S&P 500 and its Santa Rally performance. Despite some bumps in the road, there’s still hope for a strong finish. The index needs to close above a certain level to signal a bullish shift, which could happen, given the general confidence in the US economy.
