Outlook

While only two official dissenters opposed the December rate cut, dot-plot projections reveal that six Fed members, including four “silent dissenters,” were against easing, signaling deeper division within the Fed than headlines suggest.

The tactical USD view moved from neutral to negative as a dovish Fed pivot pressured the currency. Softer labor data and rising expectations of a December rate cut halted the earlier USD recovery and kept it rangebound.

A widely anticipated Federal Reserve decision on interest rates and a rotation into non-tech areas helped push the Dow Industrials higher, while the broader market and technology stocks lagged behind.

As the year comes to a close, with just about two weeks left, there is going to be plenty of news flow with consequences for global markets.

Worries are mounting that the significant investments committed to the modern technology’s infrastructure and the associated profitability may pale in comparison to the remarkable valuation expansion that has occurred among AI related companies.

The US utilities sector is entering a transformative phase, fueled by structural demand shifts from electrification and the rapid adoption of AI.

Regardless of the broader debate, one thing does seem clear: if the Fed were truly on the verge of launching a new QE program — someone forgot to tell the three-month Treasury bill.

While the world is focused on the possibility of bringing the Russia-Ukraine war to an end, there are developments in other parts of the world that are also worth a mention.

Overall bullish holiday sentiment, positive news on a handful of AI-related megacap tech names, and continued investor optimism for the Fed to adjust rates at its next meeting powered the advances.

With the delay of government statistics clouding the outlook for growth and consumer spending, Black Friday numbers will be a topic of conservation as we begin a new month.

The Fed is inching toward neutral territory but keeping its options open—because when you’re driving in the fog, you don’t hit the gas. A December cut “not a foregone conclusion,” was a statement that sent markets scrambling to recalibrate expectations.

The middle of this week saw a volatile trading session, with the S&P 500 finishing up about 40 basis points. And then there was Nvidia doing its usual song and dance with the beat-and-raise routine it trots out every quarter.