Market sentiment: RiskOn
Recap of the past week:
The Thanksgiving week turned out to be as calm as expected. Early in the week, Donald Trump made headlines, giving us a glimpse of what to anticipate in 2025. He threatened Canada, Mexico, and China with additional tariffs, a move that markets naturally reacted to negatively.
Another notable development was the ceasefire agreement between Israel and Hezbollah in Lebanon. Despite the low trading activity, markets managed to close in positive territory on Friday.
Market sentiment indicator returned back into RiskOn territory.
Below is the heatmap of last week’s key topics:
Outlook for the following week:
Let’s have a look at the following week from the economic calendar perspective.
Monday starts unusually energetically with fresh manufacturing PMI data from China. This could provide a much-needed boost to Chinese markets, which have been under renewed pressure in recent weeks. During the European session, the highlights will be updated PMI readings and December’s Sentix Investor Confidence. Meanwhile, the US session will focus on manufacturing ISM PMIs updates.
Tuesday kicks off with data from the US labor market, specifically the JOLTS Job Openings report. Earlier in the day, Swiss CPI figures will be released. Before market close, we’ll also hear from Fed’s Goolsbee in a scheduled speech.
On Wednesday, the day will be filled with service sector PMI updates from the world’s largest economies. During the US session, we’ll receive another piece of the US labor market puzzle with the ADP Employment Change report. Later, the ISM Services Index and the Fed’s Beige Book will provide additional insights into the economy.
Thursday begins with Australia’s Trade Balance, Germany’s Factory Orders, and EU Retail Sales. The US session will center on further US labor market data, including Challenger Job Cuts (November) and weekly jobless claims.
Friday, the main macroeconomic day of the week, kicks off in Germany with Industrial Production for October, followed by EU Unemployment and Q3 EU GDP updates. The US session will focus on the highly anticipated Non-Farm Payrolls (NFP) report. After last month’s partially shocking figure (+12k due to Boeing strikes and hurricanes Helene/Milton), a much stronger +183k is expected. Additionally, we’ll receive the first estimates for December’s Michigan Consumer Index, along with speeches from Federal Reserve officials.
Long-term sentiment
During Thanksgiving week, market sentiment returned to a RiskOn growth trajectory (see more on waves statistics). All negative themes were successfully absorbed, and the week concluded with the S&P 500 closing at the symbolic 6000-point mark.
We expect the market to defend last week’s gains early in the week, focusing particularly on holding the 6000-point level, with attention centered on the US labor market. Should the labor data come in without issues, further growth is likely.
Key risks remain tied to Donald Trump’s new proposals (particularly concerning China), the ongoing conflict in Ukraine, developments in France, and the protests in Georgia. Despite these potential risks, we will continue seeking long trading opportunities.
Good luck! Team moodix!