Stock Market Outlook for Wed Dec 13 2023 – All About The Fed

Prior Trading Day Summary:

On Tuesday investors got CPI numbers that were slightly higher than expected. After the initial numbers release the SPX slipped but when it failed to break below 4600, buyers returned and by the end of the day the SPX was up 21 points or almost half a percent.

The day ended with the S&P at 4643 on slightly better volume of 3.9 billion shares but still below average.

The NASDAQ ended the day up 100 points, closing at 14,533. Volume fell to 5.1 billion shares traded, 600 million shares less than Monday’s trading.

Let’s review the closing technical indicators from Tue Dec 12 2023 to see what to expect for Wed Dec 13 2023.

Stock Market Outlook: SPX Closing Chart For Tue Dec 12 2023

The index closed above all major moving averages and at the Upper Bollinger Band. This is bullish.

The 21 day moving average is rising further, which is also bullish.

The closing candlestick is bullish for Wednesday although it does indicate a morning dip could occur.

The 50 day moving average is just below the 100 day and needs to climb above it for another up signal.

The 100 and 200 day moving averages are climbing which is bullish.

The Lower Bollinger Band is rising sharply and closed on Tuesday above the 100 day moving average for a third day. A Bollinger Bands Squeeze is underway which is currently pointing at stocks moving higher out of this present squeeze.

The S&P chart is more bullish than bearish with only a single cautionary signal with the 50 day moving average still being below the 100 day.

Stock Market Outlook review of Tue Dec 12 2023

Stock Market Outlook: Technical Indicators Review

Stock Market Outlook for Wed Dec 13 2023 

For Wednesday the day will start with another new support level at the 4575 valuation. You can see this in the support and resistance section above.

Today investors get the latest FOMC interest rate announcement which is almost universally anticipated to indicate no interest rate hike. That will send stocks higher. Fed Chair Powell’s news conference at 2:30 may show some hawkish comments but if there is no rate hike, any dips during the news conference are opportunities to place further trades for another move higher.

The news conference at 2:30 can see some volatility in stocks with a few gyrations possible but without an interest rate hike, Wednesday will end higher.

Historically the second week of December has been positive 65% of the time since I have kept records from 1974.

Potential Economic and Political Market Moving Events

Major economic events this week are Consumer Price Index readings from Tuesday, the Producer Price Index due out today Wednesday and the latest FOMC interest rate decision due out at 2:00 PM today followed by Fed Chair Powell’s new conference.

Monday:

There are no economic events that will impact markets.

Tuesday:

8:30 Consumer price index was expected to be unchanged at 0.0% but came in at 0.1%

8:30 Core CPI rose slightly to 0.3% from 0.2%

8:30 CPI year-over-year did dip to 3.1% from 3.2% as expected

8:30 Core CPI year-over-year was unchanged at 4.0%

2:00 Monthly federal budget came in worse than expected at $-314 billion.

Wednesday:

8:30 Producer price index is expected to rise to 0.1%

8:30 Core PPI is expected to rise to 0.2%

8:30 PPI year-over-year is expected to be unchanged at 1.3%

8:30 Core PPI year-over-year is expected to be 2.9%, unchanged

2:00 FOMC decision on interest rates

2:30 Fed Chair press conference