When pigs fly
The past week turned out to be one of the calmest in recent memory. After the sharp surge a week earlier, when all major U.S. indexes came close to their historical highs, the market clearly needed a pause – and, as we can see, it got one. This slowdown is quite understandable, as it’s not yet clear what to do next. On the one hand, investors are hoping for further growth, but on the other, that growth is unlikely without a rate cut at the next FOMC meeting of the Federal Reserve. And that meeting hasn’t happened yet. So, market participants are waiting, as they say, “for pigs to fly.” Although, to be fair, the probability of a rate cut is still much higher than the chance of pigs actually flying.
One way or another, through heroic efforts, market participants managed by week's end to pull the indexes into the green and close with at least a modest gain. The main benchmark of the U.S. market, the S&P 500, added the least – just 0.31%. The old-timer Dow Jones (DJIA-30) looked slightly better, rising 0.5% over the week. And the high-tech NASDAQ Composite, largely thanks to companies in the microprocessor industry such as Microchip Technology, Inc. (MCHP), Dutch-based NXP Semiconductors NV (NXPI), and Synopsys, Inc. (SNPS), gained almost a full percent – finishing the week up 0.91%.
The ITS index family kept pace with its American counterparts as well, posting gains of 0.32% for the ITS World Index of global companies and 0.48% for the ITS Shariah Index. The latter, by the way, has come very close to its historical high, with less than 0.5% left to reach it.
While there were no notable macro-level developments last week, corporate news did occasionally stir investors’ interest. First, it’s worth highlighting the excellent quarterly report from one of the leaders in retail – the discount chain Dollar General Corp. (DG). Investors were particularly impressed by the company’s earnings per share (EPS), which turned out to be more than 35% above forecasts. Naturally, the reaction to such clear positive news was immediate: Dollar General’s stock price shot straight up. By the end of the week, the company’s market capitalization had increased by nearly 22%.
The second corporate headline of the week came from the film industry. The news that shook the entire market was the announcement that Netflix (NFLX) is acquiring Warner Bros. (WBD) for 82 billion dollars, including debt. Last Friday, Netflix predictably and quite convincingly outpaced Paramount Skydance and Comcast, winning the battle for Warner Bros. Discovery’s streaming and studio assets, including HBO, HBO Max and its content library. This move marks a shift for Netflix from its long-standing preference for building its business organically toward acquiring external assets.
The assets of Warner Bros. are undoubtedly valuable, but whether such an enormous price tag ($82 billion!!!) will pay off remains entirely unclear. That’s why the market’s reaction to this development has been rather muted so far.
Netflix is now the largest entertainment company in the world, with a market capitalization of over 400 billion dollars, and the same company that a former Warner Bros. executive once called “an Albanian Army.” With this deal, Netflix is clearly strengthening its position in the industry. Given its unmatched global reach and the deepest pockets in the business, it is hardly surprising that Netflix emerged as the winner.
Overall, it’s fair to say that everything is moving according to plan. Market participants are waiting for the upcoming FOMC meeting and its rate decision, and no one is in much of a hurry. The main goal for most investors right now is to finish this very successful year at the highs and avoid spoiling the mood. And if they manage to set new historical records along the way, that will be a welcome bonus for everyone.
Market expectations on December 8
And so, the decisive days of the closing year are approaching. This week will likely be the final major test for investors. Everyone understands that this test is tied to the upcoming meeting of the Federal Reserve’s Federal Open Market Committee (FOMC), which begins tomorrow, and by midnight Wednesday, Astana time, we will know its rate decision. At the moment, almost all market participants (87%, according to CME futures pricing) are confident that the Fed will cut the rate by another 0.25 percentage points. If that happens, it will undoubtedly support the market – which is precisely what investors are hoping for right now.
Therefore, Monday began with a tone of moderate optimism, and futures on the major U.S. indexes are doing their best to pull away from the zero line and move slightly higher. In practice, though, this isn’t going particularly well – the gains amount to only a few hundredths of a percent.
In addition to the FOMC meeting, several other noteworthy events are scheduled for this week. First and foremost, the release of fresh macroeconomic data – and truly fresh this time! Until now, because of the shutdown, the latest available figures were only for September, but we will finally see data for November as well. On Thursday, producer-side inflation data (the PPI index) will be published for two months at once – October and November. That’s already something! In addition, on Tuesday, the latest JOLTS report on job openings in the U.S. economy will be released, which serves as a reliable indicator of the labor market’s condition.
In addition to macroeconomic releases, investors will also be watching the next batch of quarterly earnings. There aren’t many reports this week, but the companies involved are highly significant. On Wednesday, after the market closes, results will be released by one of the tech sector’s superstars – Oracle (ORCL). On Thursday, also after the final bell, earnings will come from one of the leaders in the microchip industry – Broadcom (AVGO). And if we add to that the reports from major retailers such as Costco (COST) and Lululemon Athletica Inc. (LULU), it becomes clear that investors will have plenty to focus on, and plenty of opportunities to try to make money.
Overall, the week is expected to be intense but extremely interesting. And most likely, it will indeed be the last truly active trading week, after which the market will begin to glide smoothly into the new year, 2026.