China is committing to delivering results next year, with top officials targeting an increase in consumption, investment returns, and domestic demand. They are expected to cut the reserve requirement ratio (RRR) and boost fiscal stimulus. While these announcements seem more significant than those made at the end of September, they still lack specific details and clarity. After trading as high as 20,600, HSI December futures fell close to 20,000. We’ll see how the session unfolds. Any dips remain a buying opportunity in anticipation of support in 2025, especially considering Trump’s invitation for Xi to attend his inauguration—a friendlier gesture compared to his debut in 2016.
In the U.S., equities took a pause following a strong Producer Price Index (PPI) report that raised concerns about a resurgence of inflation. Although yesterday’s Consumer Price Index (CPI) was in line with expectations, it indicates an upward trajectory toward the 2% target. The yen weakened to 153, while the euro traded around 1.04 amid expectations of a 25 basis point rate cut from the ECB and weaker projections.
The PPI came in at 0.4%, exceeding the expected 0.2%, marking its highest level since June. Jobless claims rose to 242,000, with last week’s figures revised upward.
While these developments are not dramatic at the moment, they serve as a reminder of the market’s complacency and its conviction in a “Goldilocks” scenario for the U.S. economy. However, as August demonstrated, if cracks begin to appear, the market may sell off sharply—one of the main risks heading into 2025. Could 22,000 be the level at which to start shorting the Nasdaq?