Stock Market Outlook for Wed Dec 18 2024 – All About The Fed

Prior Trading Day Summary:

Tuesday was another choppy day which ended with all 3 indexes lower.

The S&P closed down 23 points to 6050 which wiped out yesterday’s gain. Volume rose to 4.7 billion but new 52 week lows were well ahead of new highs with 163 new lows and just 43 new highs. 71% of all stocks on the SPX were falling on Tuesday.

The NASDAQ closed down a modest 64 points to end the day at 20,109. Volume rose by 800 million shares to 9.8 billion. New lows are 2 to 1 against new highs. 62% of all stocks on the NASDAQ were falling.

Wednesday is all about the Fed’s interest rate decision but once released, the technical indicators will come back into play.

Let’s review the technical indicators at the close on Tue Dec 17 2024 to see what to expect for Wed Dec 18 2024.

Stock Market Outlook: SPX Closing Chart For Tue Dec 17 2024

The index closed lower on Tuesday but stayed above the 21 day moving average. This is still bearish.

The closing candlestick is bearish for Wednesday with a shadow which often indicates selling pressure on Wednesday is likely.

The 21 day moving average is higher at 6020. The rally is slowing considerably and most noticeable in the 21 day.

The 50 day moving average is higher at 5920. This is bullish.

The 100 day moving average is rising and closed at 5776 which is bullish.

The 200 day moving average is in an uptrend and closed at 5521 which is bullish.

The Lower Bollinger Band is below the 50 day but turning higher. The Upper Bollinger Band is falling. A Bollinger Bands Squeeze is likely shortly. At present stocks look set to move lower out of the squeeze.

The S&P chart is more bearish than bullish for Wednesday.

SPX Stock Market Outlook review of Tue Dec 17 2024

Stock Market Outlook: Technical Indicators Review

Stock Market Outlook for Wed Dec 18 2024 

Wednesday will be all about the Fed’s decision on interest rates. At 2:00 PM investors and analysts expected a quarter point rate cut. They also expect in the following news conference which starts at 2:30, Fed Chair Powell will warn against believing a lot more rate cuts are coming. Instead it is expected the Fed may dampen the outlook for a large number of rate cuts in 2025. I expect he will reaffirm his stance on being data dependent going forward.

Once the interest rate is announced and the news conference gets underway I am expecting stocks to move lower while investors decide whether they believe stocks can move higher into the end of the year.

Potential Economic and Political Market Moving Events

Monday:

8:30 Empire State manufacturing survey was much worse than expecting coming in at just 0.2 versus 31.2 prior.

9:45 S&P flash US service PMI rose to 58.5 rather than slipped.

9:45 S&P flash US manufacturing PMI slipped more than estimated to 48.3 from 49.7 prior

Tuesday:

8:30 Retail sales came in higher than estimated at 0.7%

8:30 Retail sales minus autos came in lower than expected at 0.2%

9:15 Industrial production was lower than estimated at 0.1%

9:15 Capacity utilization was lower than estimated at 76.8% 77.2% from 77.1% prior

10:00 Home Builder Confidence index was unchanged at 46

Thursday:

8:30 Housing starts are estimated to rise to 1.34 million from 1.31 million prior

8:30 Building permits are estimated at 1.43 million, up from 1.42 million prior

2:00 FOMC interest rate announcement

3:40 Fed Chair Powell news conference