S&P 500 (SPY) Report – 12/13/23

Good morning, traders!

The S&P 500 ($SPY) is trading above yesterday’s close. Let’s get into it… 

The U.S. stock market is showing positive signs, with futures indicating a slight increase as investors await the Federal Reserve’s latest policy decision. These movements reflect investors’ anticipation of the Federal Reserve’s decision on interest rates and their implications for the market.

The Federal Reserve is expected to maintain the benchmark overnight borrowing rate between 5.25% and 5.5%. However, investors are particularly interested in Federal Reserve Chair Jerome Powell’s remarks, looking for hints about potential rate cuts in the future. Currently, the market predicts rate cuts might start in the next spring, but Powell’s stance could influence these expectations.

Treasury yields are also a focal point, with the 10-year Treasury yield having decreased to 4.2% from over 5% in October. Liz Ann Sonders, Chief Investment Strategist at Charles Schwab, suggested that Powell might acknowledge these shifts in yields as contributing to the economic easing, a reversal of previous trends where increasing yields indicated monetary tightening.

Investors are also closely monitoring other economic indicators like the November producer price index, expected to show a slight rise, which could impact market strategies. The stock market has been experiencing a positive trend, with the Dow and S&P 500 reaching their highest levels since January 2022, and the Nasdaq Composite achieving its highest point since April 2022. These trends, combined with the upcoming Federal Reserve decisions and economic data, are key factors influencing investor sentiment and market movements.

Wednesday Economic Events:
MBA Mortgage Applications 7:00am ET
PPI-Final Demand 8:30am ET – High Volatility Expected
EIA Petroleum Report 10:30am ET – High Volatility Expected
FOMC Announcement 2:00pm ET – High Volatility Expected
Fed Chair Press Conference 2:30pm ET – High Volatility Expected

Fed Speaker Scheduled:
No Fed Speakers Scheduled

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