17 Dec Market Hesitated Ahead Of FOMC Rate Decision

We saw the major U.S. equities indexes hesitated as the Federal Reserve kicked off its final two-day policy meeting of 2024. While the central bank is widely expected to announce a third consecutive interest rate cut on Wednesday afternoon, investors are likely preparing to comprehend the message and language in the accompanying statement and the subsequent press conference with Fed Chair Jerome Powell for suggestions about what is in store for next year (2025).

The S&P 500 slipped 0.39%, while the NASDAQ lost 0.32%. The DJIA finished 0.61% lower, extending its losing streak to nine straight negative trading sessions. U.S. equities were lower in early afternoon trading, with the DJIA losing streak continuing and the NASDAQ falling from its record high yesterday.

Health care stocks remained under pressure following President-elect Donald Trump's comments about removing the "middleman" in the prescription drug markets.

Humana (HUM) shares lost 10.2%, the steepest daily drop of any S&P 500 stock on Tuesday, after Piper Sandler analysts flagged earnings risks related to certain plans that provide coverage to military veterans.

CVS Health (CVS) shares sank 5.5%, extending a string of recent losses posted as political sentiment against the pharmacy benefit management (PBM) business gathers steam.

Only one out of 11 S&P 500 sectors managed to close in the green with a modest 0.28% gain, and this is thanks to Tesla (TSLA) shares which advanced 3.64% as it built on the previous session's record high.

As investors go through the economic data due ahead of the Federal Reserve's next interest rate decision, U.S. Treasury yields remain unchanged.

U.S. retail sales figures for November showed an increase of 0.7% on the month, surpassing Wall Street's expectations. The report will be followed by the latest building permit and housing starts data on Wednesday, before the Fed announces its interest rate decision that same day.

The yield on the 10-year Treasury was down less than 1 basis points at 4.397%. The 2-year Treasury yield also slipped less than 1 basis point lower to 4.245%. Yields and prices move in opposite directions. One basis point equals 0.01%.

Despite the recent significant surge for Tesla, there is still potential for more upside as seen from the short-term and long-term MA, MACD is also not showing signs of any weakness with continued upside movement.

MTF is also giving the signal of a strong upward trend, and this should be able to give investors confidence to look at Tesla as I am expecting a price target of $500 in the near time.

I will be monitoring the price action on the trading day on 18 Dec 2024.

For FOXA, there is a potential bullish MACD upside forming and with FOXA trading above both short-term and long-term MA, there is much upside that could gather, this is confirmed with a strong upward trend from the MTF.

Despite this decline, there is still much potential for upside coming from Broadcom, as it is trading way above the short-term and long-term MA, and MACD is also giving upside movement, with MTF providing a strong upward trend, we could be seeing AVGO making another new highs.

I am expecting market to be trading in mixed mode after the FOMC decision, as investors would be comprehending how the latest interest rates decision might affect how they are going to invest and trade in 2025.

So there might be a chance that small-caps growth stocks could be gathering investors interest as a result.

Appreciate if you could share your thoughts in the comment section whether you think market would be trading in a mixed mode and investors remain cautious ahead of 2025 rate decision direction.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.