The U.S. Federal Reserve decided to keep rates unchanged, and hinted at rate cuts in 2024
The U.S. Federal Reserve injected much-needed positivity into the market this week after holding interest rates steady for the third-straight meeting. The central bank also indicated three rate cuts to come next year and lowered its 2024 inflation forecast. Inflation data bolstered sentiment as well, along with Thursday's retail sales and jobless claims data.
This week's rally sent the Dow Jones Industrial Average (DJIA) on a record-breaking run, repeatedly hitting all-time highs and rising above the 37,000 level, while the S&P 500 Index (SPX) and Nasdaq Composite (IXIC) hit their highest levels since January 2022. Meanwhile, oil prices hit their lowest levels since June, the 10-year Treasury yield fell below 4% for the first time since August, and the Cboe Volatility Index (VIX) marked its lowest since Jan. 2020.
Stocks Making Headlines
Moderna (MRNA) made headlines this week, after mid-stage trial data showed the company's experimental cancer vaccine with Merck (MRK), combined with immunotherapy Keytruda, helped melanoma patients reduce the risk of death or relapse after three years. Warren Buffet's Berkshire Hathaway (BRK.A) bought 10.5 million shares of Occidental Petroleum (OXY), the same day reports came that the oil name bought CrownRock for $12 billion. Macy's (M) is in the midst of a merger as well, after news that Arkhouse Management and Brigade Capital reportedly made a $5.8 billion offer to take the retailer private. Plus, the departure of Lucid Group's (LCID) CFO sent the stock lower.
Analyst Notes This Week
Retail stocks Nike (NKE) and Best Buy (BBY) received analyst upgrades on Monday, along with 2023 outperformers Pinterest (PINS) and Snap (SNAP). Meanwhile, analysts see massive upside for Zillow Group (ZG) and Roblox (RBLX), while Hertz (HTZ) was downgraded on potential 2024 challenges.
Looking Ahead as the Year Winds Down
The week before Christmas will bring a flood of economic data, as well as a handful of earnings, including reports from General Mills (GIS) and Nike. There are a couple ways to play the S&P 500 heading into the end of the year, per Schaeffer's V.P. of Research Todd Salamone, while the VIX's recent plunge poses an interesting opportunity for options traders, according to Schaeffer's Senior Quantitative Analyst Rocky White.