Last week’s market and economic data key points:
- Fed’s third rate cut sparks market dive
- Fed chair powell signals cautious 2025 approach
- U.S. GDP growth reaches 3.1% in q3 2024
- November PCE price index increases to 2.4%
- U.S. stocks fell on fed concerns, slight recovery Friday
- Nike’s revenue down 8%, income drops 26%
- Fedex plans spin off freight business for cost-cutting
- Palantir soared 6% on major army contract extension
- Boeing rose with massive Pegasus airlines order
- Pfizer climbed 3% with FDA approval for cancer drug
- Micron stock fell on weak guidance.
- U.S. government faces partial shutdown if spending bill not passed
- Euro set for third-straight weekly loss
- Bitcoin dropped from record $108k
- Crypto seems to be in a correction phase
Table of Contents
Last Week’s Reports
Economic Reports
The FOMC decided to cut the federal funds rate by 0.25 percentage points, bringing it to a range of 4.25%-4.5%. This marks the third consecutive rate cut this year.
Fed Chair Jerome Powell said in the Fed conference they’re now taking a cautious approach for 2025 as rates get closer to a neutral level for the economy. The Fed’s new projections show only two more 0.25% cuts in 2025, down from four expected in September. This change reflects a less strict policy, with rates expected to be 3.9% by the end of next year. After the announcement, S&P 500 fell 2.9%.
In the third quarter of 2024, the U.S. GDP grew by 3.1%, up from 3.0% in the previous quarter. This estimate is based on more complete data than earlier ones.
In November, the PCE Price Index went up by 0.1%. The PCE price index in November increased by 2.4%, below the expectations of 2.5%. Prices for goods decreased by 0.4%, but services prices went up by 3.8%.
In November, Personal Income in the U.S. rose by 0.3%. This increase was slightly below market expectations of a 0.4% increase. The rise in personal income was mainly due to higher compensation, which increased by 0.6%.
Also, Wages and Salaries grew by 0.6%, while supplements remained steady at 0.5%. However, disposable personal income rose by 0.3%. Both are above monthly inflation.
Personal Spending in the U.S. rose by 0.4% in November, reaching an annual rate of $20.2 trillion. This was close to market expectations of 0.5%. Consumer spending on goods rebounded sharply, increasing by 0.8%, indicating that consumers are still spending.
Earning Reports
Micron
Micron Technology (MU) Q1 2025 revenue was $8.71 billion, slightly below estimates, but their EPS of $1.79 surpassed expectations. The quarter saw strong growth in data center revenue, surpassing 50% of total revenue for the first time. Despite this, weaker consumer markets affected their Q2 guidance, with projected revenue and EPS below the consensus estimate.
Following the earnings report, Micron’s stock dropped 16% due to concerns over the weaker Q2 outlook.
CEO Sanjay Mehrotra acknowledged the challenges in consumer markets but remained optimistic about growth in high-margin areas like data centers and AI solutions in the latter half of the fiscal year.
Nike
Nike (NKE) reported Q2 2025 revenue of $12.4 billion, an 8% decrease from the previous year. Direct revenues dropped 13% to $5.0 billion, and the gross margin fell 43.6%. Diluted EPS was $0.78. Also, the company’s net income fell by 26% to $1.2 billion.
Nike’s Q3 2025 outlook is cautious, with expected revenue declines in the low double digits and gross margins anticipated to decrease.
CEO Elliott Hill emphasized a focus on sports and digital restructuring for long-term growth.
FedEx
In Q2, FedEx (FDX) reported EPS of $4.05, a 1.5% increase, and $22 billion in sales, a 1% decline. FedEx Express saw profit growth due to cost reductions and increased export volumes, while FedEx Freight faced challenges but benefited from higher base yields.
CEO Raj Subramaniam highlighted improved operations and positive results in the FedEx Express segment despite challenges. FedEx plans to spin off its freight business into a separate public company within 18 months as part of a cost-cutting strategy.
The stock saw mixed reactions, with investors encouraged by cost-cutting but concerned about lower-than-expected revenue.
Indices
Indices’ Weekly Performance:
US equity indexes declined this week. This was due to concerns about a slowdown in the Federal Reserve’s interest-rate cuts next year and the possibility of a partial government shutdown. This decline happened despite an easing in the Fed’s preferred inflation measure.
Dow down 2.3% for the week and S&P 500 fell for the second week, down about 2% due to the Fed’s hawkish rate cut, causing a selloff. After hitting a low, it shows signs of recovery on Friday.
This SPX chart shows the index pulling back from strong support while the RSI diverges. This divergence could push the index back to its broken trend line.
Stocks
Sector’s Weekly Performance
Source: Finviz
Every sector has experienced significant declines, with energy, real estate, and materials being hit the hardest. Cyclical sectors are also seeing downturns in December, but a recovery might be on the horizon.
- Energy: The sector declined by 5% due to renewed demand concerns from weak Chinese economic data and investor caution ahead of the Fed’s rate decision.
- Industrials: The sector fell by 3.4%. However, Honeywell saw a slight increase after announcing it is considering separating its aerospace business.
- Consumer Defensive: The sector fell by 2.8%. Lamb Weston plunged by around 22% after cutting its annual sales forecast and announcing a CEO change. General Mills also declined due to a lower annual profit outlook.
- Healthcare: The sector fell by 2.8%. Pharmacy benefit managers dropped after Trump’s remarks about eliminating middlemen, with CVS down around 10% and UnitedHealth down about 4%. However, Eli Lilly gained on Friday after Novo Nordisk’s new obesity drug underperformed in a study.
- Consumer cyclical: The sector dropped by 2.6%. Nike’s muted forecast led to a decline, but Darden Restaurants, owner of Olive Garden, hit a record high after raising its sales forecast, gaining 12.5% for the week.
- Tech: The sector fell by around 1.2%. Micron dropped by around 12% as its quarterly forecast indicated weak demand for PCs and smartphones.
Stock Market Weekly Performance
Source: Finviz
Top Gainers in the S&P 500
- Palantir (PLTR): The stock price surged by 5.9% due to extending a partnership with the U.S. Army under a contract worth up to nearly $619 million over four years.
- Applovin (APP): The stock price increased by 5.1% after pulling back into a technical buying opportunity.
- Boeing (BA): The stock price rose by 4.5% after an order from Pegasus Airlines to deliver 100 of its 787-10 jets, with an additional opportunity for 100 jets.
- GE Vernova(GEV): The stock price climbed by 3.2%.
- Pfizer (PFE): The stock price went up by 3%. The company announced FDA approval for using its Braftovi cancer drug with Eli Lilly’s Erbitux to treat metastatic colorectal cancer.
Commodity
Weekly Performance of Gold, Silver, WTI and Brent Oil:
Source: Finviz
Gold prices experienced their weekly decline, falling by about 1% last week. This drop was influenced by the US dollar gaining strength, making gold more expensive for holders of other currencies.
The gold price is currently consolidating between its support and resistance levels, with decreasing momentum.
Crude oil prices fell due to fears of a potential US-EU trade war following incoming President Trump’s tariff threats and concerns about a possible US government shutdown affecting economic growth.
Forex
Weekly Performance of Major Foreign Exchange Pairs:
The US Dollar Index (DXY) has shown a notable performance this week. It reached a two-year high earlier in the week but experienced some profit-taking, ending the week.
In the broader Forex market, the USD has strengthened against most major currencies.
The EUR/USD pair has been under pressure, falling below the 1.0500 level due to a stronger dollar and mixed economic data from Europe. Meanwhile, the AUD/USD pair reached a 13-month low, impacted by strong US economic data and a weaker Australian dollar.
Crypto
Crypto Market Weekly Performance:
Source: quantifycrypto
Bitcoin has faced a significant decline, dropping to around $95,000 after previously hitting record highs above $108,000.
The BTC price is currently consolidating between its support and resistance levels, with decreasing momentum.
Altcoins haven’t fared much better. Ethereum, Solana, Dogecoin, Cardano, and Shiba have all seen substantial drops, with declines ranging from 11% to 23.3%. The entire market seems to be in a correction phase, driven by macroeconomic factors and heightened selling pressure.
Next Week’s Outlook
Economic Events
This week marks the Christmas holiday period, and as such, there are no major economic indicators or corporate earnings reports scheduled.
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