There are investors who believe that an increase in stocks left markets more susceptible for the corrections in case the consumer prices do not keep cooling or the US Fed doesn’t end their rate-hiking campaign. Global Indexes closed higher for the week, with S&P 500 rising ~0.2% for the week ended Friday. Index now sits at 6th straight weekly rise, longest winning streak in ~4 years. With this, this index remains at its highest closing level since the month of March 2022. Some sort of optimism has been priced in on the earnings and the US economy and US Fed, which has supported the S&P 500 in reaching to this level.
Since global indexes closed higher for the week, S&P 500 index saw an increase of ~0.41% to close the session at ~4,604.37 points on Friday, with Nasdaq gaining ~0.45% to end at 14,403.97 points. However, Dow Jones Industrial Average went up by ~0.36% to end at 36,247.87 points. Dow Jones was up marginal ~0.01% for the week ended Friday, marking its 6th straight weekly gain. This index has seen longest run of positive weeks since the month of February 2019.
Taking cues from the global markets, Indian markets continued its positive momentum. For the week ended December 8, 2023, BSE Sensex was up by 2.01% and Nifty50 saw an increase of ~1.97%. For the coming week, slew of economic data should decide the momentum. India’s consumer price index (CPI) inflation for November month and index of industrial production (IIP) data for the month of October are expected to be released on December 12. On 13th December, the wholesale price index (WPI)-based inflation data is slated to be released.
Central bank policy decisions are expected to dominate the movement in the global markets. The US Fed is expected to announce policy decision on 13th December. Then, on 14th December, Bank of England and the European Central Bank will be announcing their decisions. Outcome of the US Fed policy meeting should shape market sentiments.
Coming to the Asian markets, despite of the fact that gains in the US markets should offer some direction, Asian economic calendar is required to have some consideration. From Japan, BSI Large Manufacturing Index needs attentions. Global economists expect this index to rise by ~1.1% in 4Q vs. ~5.4% gain seen in the prior quarter.
Apart from the quantitative data, Chinese stimulus chatter, commentary from the Bank of Japan, and movements of government bond yields should also be monitored.