General Market Analysis 22/12/2023 – IC Markets

Markets Resume Drive Higher for Christmas – Nasdaq up 1.25%

US markets shrugged off a mid-week dip to drive higher again yesterday with the three major indexes all recording solid gains. The Nasdaq led the way higher, finishing up 1.26% on the day, closely followed by the S&P which added 1.03% and the Dow Jones which closed up 0.87%. Treasury yields ground a little bit higher with the benchmark 10-year now trading back at 3.89%. The dollar however dropped on the day, losing 0.6% against the other major currencies on the index. Oil dropped slightly as traders continue to monitor developments in the Red Sea closely and Gold moved higher in line with the dollar depreciation.

Traders Preparing for Christmas Markets

Traders across the globe are preparing for the usual messy market conditions that come at this time of the year as desks operate on skeleton staff for the next week or so. This year could be a bit different though as many products in financial markets are sitting at interesting levels. Stock markets have had a stellar run over the last few weeks and investors are happy to go with the flow at the moment but there are concerns that the good times may not roll into the new year and with liquidity set to dry up in the holiday period there is a good chance that we could see some very whippy moves in the market in the coming days. These trading days are typically tricky with large amounts of down time where there is very little flow and markets sit in the doldrums before something triggers a very volatile and swift move that can catch some traders unaware and result in big swings in P&L.

‘Twas the Night Before Christmas!

It is the last trading day before markets hit the Christmas holiday season and traders experience choppy conditions in the days ahead, and, almost typically of 2023 we have one of the most key data releases of the month in the hours ahead of the weekly close. There is little on the even calendar in the Asian session but once again we have some big data in the UK – Retail Sales – that could see some moves in the London market before the desks hand over to New York and head to the pub for the traditional pre-Christmas pint or three. The big event once again comes in the New York session with the release of the Fed’s favoured inflation indicator the Core PCE Price, this comes alongside the Canadian GDP number and the US Durable good data which should keep investors busy in the end of the week.

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