CNBC’s Investing Club with Jim Cramer released its weekly update, known as the “Homestretch,” which provides an actionable afternoon analysis just before the market closes. According to Jim Cramer, stocks made a strong comeback from their initial premarket lows due to three key developments.
One factor was the oversold S&P 500 Short Range Oscillator, indicating heavy selling pressure in the market. Historically, this has been a good time to buy with a 30-day view. The Oscillator’s deep oversold state made any positive news spark a rally.
A significant event occurred before Friday’s open when the personal consumption expenditures (PCE) price index came in slightly cooler than expected in November. This data point jump-started a big bond price rally, causing yields to fall. Rising Treasury yields have been detrimental to stocks, but this recent drop alleviated concerns.
Chicago Fed President Austan Goolsbee’s comments also contributed to the market’s rebound. He expressed that if conditions continue as they have over the last 18 months, interest rates might decrease more in 2025. This easing of fears about an aggressively rate-cutting Fed eased immediate market anxiety.
However, despite Friday’s gains, the rally may not be enough to pull major indices out of the red for the week. The Dow and S&P 500 remain down for the week after Wednesday’s significant decline on the Fed’s rate cut announcement. Thursday saw little change in stocks, making Friday’s recovery a welcome break from a three-day losing streak.
Looking ahead, there are few market events scheduled, with no major earnings reports or analyst meetings planned. Economic data will be released, including consumer confidence and durable goods orders. The severely oversold market may remain tilted downward despite the recent gains.
As a member of the CNBC Investing Club with Jim Cramer, you can expect trade alerts before he makes trades in his charitable trust’s portfolio. However, please note that past performance is not indicative of future results, and no specific outcome or profit is guaranteed.
Source: https://www.cnbc.com/2024/12/20/here-are-the-3-things-behind-the-friday-stock-market-rally-that-almost-wasnt.html