Market Monitor December 11

Highlights

On Wall Street, the Nasdaq made headlines on Wednesday, closing above the 20,000-point milestone for the first time, driven by significant gains in the technology sector.

Tesla was a standout performer, with its stock surging nearly 6%, while Alphabet rose over 5% on enthusiasm surrounding its recent quantum breakthrough.

Although US inflation in November slightly increased to 2.7%, it was perfectly in line with expectations, boosting the likelihood of a Fed rate cut. This fueled optimism in the broader market, where the S&P 500 closed 0.8% higher.

The Dow Jones lagged behind, primarily due to a sharp decline in UnitedHealth Group (-5.6%). The recent murder of the CEO of its insurance division has raised investor concerns about potential stricter regulations in the healthcare sector. CVS also dropped over 6%.

Major Indices

SPY (S&P 500 ETF):

• Closing Price: $607.46 (+0.77%)
• Short-Term (ST) Trend: Positive, with gains of 1.13% over 2 weeks and 1.77% over 1 month.
• Long-Term (LT) Trend: Solid, with a 12-month return of +29.43%.
• Upward momentum is supported by a rising moving average.

QQQ (Nasdaq 100 ETF):

• Closing Price: $529.92 (+1.8%)
• ST Trend: Very strong, with a gain of 1.27% in 1 week and 3.23% in 1 month.
• LT Trend: Impressive growth of 30.73% over 12 months.
• Technology stocks continue to lead the market, underscoring Nasdaq's dominance.

IWM (Russell 2000 ETF):

• Closing Price: $237.77 (+0.45%)
• ST Trend: Slightly negative performance (-1.3% in 1 week).
• LT Trend: Positive growth of 20.67% year-over-year, though less pronounced than SPY and QQQ.
• Small-cap stocks are lagging behind large caps.

Sector Performance

The sector analysis highlights performance over various timeframes (1 week, 1 month, and 3 months)

1 Week

• Top Performers: Information Technology, Communication Services
• Weakest Performers: Real Estate, Industrials

1 Month

• Top Performers: Information Technology, Communication Services
• Weakest Performers: Real Estate, Healthcare

3 Months

• Top Performers: Information Technology, Industrials, Financials
• Weakest Performers: Real Estate

All info available on our Sector Performance page

Breadth Indicators (Historical Breadth Numbers)

Advancing vs. Declining Days:

• Dec 11: 55.1% of stocks advanced, reflecting positive market sentiment.
• Dec 10: Only 33.9% of stocks advanced, showing clear recovery on Dec 11.

Simple Moving Averages (SMA):

• SMA(50): 60.3% of stocks are above this level, indicating a strong market base.
• SMA(200): 62.5% above this level, highlighting a healthy long-term trend.

New Highs/Lows (NH/NL):

• New highs (NH) on Dec 11: 4.4%, reflecting a stable upward trend.
• New lows (NL) are minimal (1.9%), emphasizing the strength of the rally.

All info available on our Market Monitor page

Summary

The markets generally show a strong upward trend, with technology leading the charge. Nasdaq's impressive performance highlights the dominance of growth stocks, while small-caps (Russell 2000) lag behind.

Sectors such as information technology and communication services demonstrate robust growth, while real estate and healthcare are underperforming. The inflation outlook and technical indicators suggest a more stable environment, increasing the likelihood of further market gains.

This data serves as a solid foundation for both short- and long-term investors to develop strategies focused on sector rotation and trend-following investments.