The Tribune

By CHRIS ILLING CCO

ActivTrades Corp

Hopes remain for a continuation of the year-end rally on the equity markets. After the recent price gains, investors are hoping for such an outcome. In the coming week, economic data and signals from central banks are likely to dominate events.

While it was relatively quiet on the international stock markets during the latest Thanksgiving holiday, we can expect more impulses from the US and European indices again this week.

On the stock market, there has recently been a clearly recognisable trend towards more “security”. Companies of a certain size, which are less dependent on external capital, are particularly in demand. This is one of the reasons why large and mega caps have risen sharply recently compared to small capitalisation stocks.

Some interesting data from the US and Europe will be published, which could help breathe new life into currently somewhat dormant share prices. And one or the other major central bank chiefs could come into focus with news. Today, the president of the European Central Bank (ECB), Christine Lagarde, will give a speech, and on Friday, the chair of the Federal Reserve, Jerome Powell, will follow with his statements.

In view of the gains in the S&P 500 of around 8 percent since the beginning of November 2023, however, the air for an upside is getting thinner. In addition, the leading index has still not managed to sustainably overcome 4,600 points.

Over the course of the week, investors will focus primarily on the growth momentum in the US. After all, the strength of consumption and the economic vitality of the world’s largest economy are central factors that will have a significant influence on the Federal Reserve’s interest rate meeting in mid-December.

On Thursday, therefore, attention will be on the personal income and spending of US citizens, as well as the US Federal Reserve’s preferred inflation indicator, PCE (private consumption expenditure). The core rate of private final consumption expenditure excludes volatile prices for food and energy.

Presently, the market does not expect further interest rate hikes in the US. After all, key interest rates have been raised by more than five percentage points since March 2022. The slogan “higher for longer” is currently making the rounds. It describes the prospect that higher interest rates will probably persist for a longer period of time.

In the euro region, the focus will be on the inflation data in November. They will be published on Wednesday and Thursday. After inflation fell significantly in October, experts expect a slight decline in November.