Bullish December Ahead: Fed Easing Signals Meet Market Seasonality

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Main Content:

1.    Major indexes weekly performance 

2.    U.S stocks weekly wrap 

3.    S&P 500 sector index weekly/month performance 

4.    China/Hong Kong stocks weekly wrap 

5.    Singapore stocks weekly wrap 

6.    Major indexes weekly chart and technical support & resistance levels

U.S.

For the week of Nov 28, U.S. equities finished the holiday-shortened week higher, supported by growing expectations of a December rate cut. A series of softer-than-expected economic data reinforced the Federal Reserve’s dovish tone, keeping market sentiment upbeat ahead of the upcoming FOMC meeting. The technology-heavy Nasdaq Composite(COMP) posted strong returns, rebounding from the prior week’s sell-off as concerns regarding elevated valuations and spending on artificial intelligence (AI) appeared to take a back seat to optimism around the growth potential from the technology. Refer to below major indexes weekly performance.

After a brief wobble in early November, stocks regained momentum, with the S&P 500 (SPX) ending the month slightly higher. Seasonality also supports a constructive outlook: historically, the post-Thanksgiving period tends to deliver solid returns. Over the past 30 years, December has averaged a gain of around 1%, with markets rising roughly 70% of the time. Refer to below major indexes performance for the month of November.

Key highlights for the week and next:

1.    The probability of a Fed rate cut in December rose to 86.9% by the end of Friday, according to the CME FedWatch Tool. FOMC meeting is scheduled on 9-10 December. 

2.    Delayed data released during the week including retail sales increased by 0.2% in September, down from 0.6% in August and below consensus for around 0.4% increase; September PPI rose 0.3% in line with consensus estimates. 

3.    Labor Market Mixed: Initial jobless claims fell to a seven-month low (216k), signalling ongoing resilience, but continuing claims rose to 1.96 million, near this year’s high—pointing to softening in longer-term employment conditions. Consumer confidence also slid sharply to 88.7, the weakest since April. 

4.    Fed’s Beige Book Signals Cooling Activity: The Fed’s latest Beige Book showed largely flat economic activity, slight declines in employment, and moderate price increases—much of it driven by tariff-related cost pressures. Consumer spending softened further, though high-end retail remained resilient. 

5.    Economic data in focus in coming week: ISM manufacturing PMI will be released on Monday Dec 1, September PCE( key Fed inflation indicators) rescheduled to Dec 5. 

SPX sectors in play

All the eleven S&P sectors posted gains for the week. Tech dominated Consumer Discretionary(XLY) and Tech(XLK) were top performers, Energy(XLE) lagged. Refer to below SPX sectors ETF weekly performance table.

Indexes technical levels

The S&P 500 (SPX) has recouped most of its early November losses over the past five trading sessions, marking five consecutive days of gains. During this period, the SPX rose from 6,538.76 to 6,849.09, representing a 4.7% gain, and closed the week with a strong 3.73% weekly advance. The Nasdaq Composite (COMP) and Dow Jones Industrial Average (DJI) also posted robust weekly gains of 4.91% and 3.18%, respectively(refer to the above weekly performance table). Click below three indexes for their weekly charts.

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

Mainland China stock markets advanced as investors enthusiasm for domestic technology and AI trades outweighed growth slowdown concerns. The Shanghai Composite Index(SSE) added 1.4% and the blue-chip CSI 300 rose 1.64%. In Hong Kong, the benchmark Hang Seng Index gained 2.53%.

Key highlights for the week and outlook for China/HK:

1.    Profits in China’s industrial sector unexpectedly fell 5.5% in October year on year, the country’s statistics office reported. The drop in industrial profits came after increases of more than 20% in each of the prior two months, adding to evidence that China’s economy lost momentum in the fourth quarter. It followed data earlier this month showing that China’s producer price index remained in negative territory in November for the 37th month, even after Beijing launched its so-called anti-involution campaign aimed at curbing price wars and excessive output in industries from food delivery to car manufacturing. Nevertheless, most analysts believe that China will meet its official growth goal of about 5% this year. 

2.    Economic data in focus in coming week: China will release its Nov PMI. 

Refer to below Hang Seng Index stocks’ weekly performance table.

Click below for SSE and .HSI weekly chart.

SSE weekly chart

.HSI weekly chart

 

Singapore

The Straits Times Index (STI) added 1.23% to close at 4,523.96 this week, recovering most of last week’s losses. JP Morgan upgraded DBS to a $70 target, OCBC to ‘overweight’, SGX to ‘overweight’ with $18.50 target, and UOB to ‘neutral’, citing Singapore’s evolving role as a financial centre and supportive policy initiatives. The analysts also raised their STI 12-month target to 6,000 points from 5,000, driven by improved market liquidity, IPO activity, and wealth management growth, while UOB faces lingering credit risks.

Refer to below STI index stocks’ weekly performance.

Click below for STI weekly chart.

STI weekly chart

Source: Some contents and data excerpted from various public market reports. Please comment to claim copyright ownership of any material, and I will remove it if necessary.