SignalPlus Macroeconomic Analysis Special Edition: Where is Santa Claus?

The market has taken a sharp downturn. Following a strong rebound in risk appetite on Friday, crypto asset prices experienced a severe setback at the beginning of December, with BTC once again driven by stop loss orders, falling below $87,000 during the quiet trading hours of the Asian morning.

Although it is difficult to attribute to a single cause, the overall risk appetite remains fragile following the market cleanup in October and November, and a series of negative headlines that have emerged in recent trading sessions have exacerbated the fall. Another OG protocol's DeFi was hacked (Yearn staking), a DEX terminal abandoned its much-anticipated launch due to a tough market environment (Terminal Finance), OG Arthur Hayes publicly “sang the blues” for the recent Monad ICO (implying a 99% downside), S&P downgraded USDT to “weak” (insufficient disclosure of information), and the People's Bank of China reiterated its cautious stance on Crypto Assets trading and stablecoins—comprehensively, we have reason to believe that we are still firmly in bear market territory until further notice.

In terms of the stock market, the S&P 500 index rose 3.7% last week, led by the semiconductor sector (+5.4%) and the retail sector (+4.7%). Despite an overall decline in retail trading volume, retail darling stocks still achieved a strong weekly rebound.

Additionally, early signs from Black Friday sales indicate that we have set another record, with online sales reaching nearly $12 billion (a year-on-year increase of 9%), a historic high, while Cyber Monday is expected to bring in another $14 billion in revenue. So far, consumer spending in the U.S. appears to remain strong.

In addition to holiday sales, this week's economic schedule is quite busy, with data on ISM, ADP, initial unemployment claims, PMI, and the University of Michigan consumer confidence index being released. Despite the constant market noise, the PMI index has been slowly rising within the healthy expansion range of 50–55 since 2022, while the Atlanta Fed's GDPNow model continues to predict that the economic growth rate will exceed Wall Street expectations, indicating that the economic fundamentals remain strong.

The most important economic data dates for the remainder of this year will be in the next two weeks: the FOMC meeting on December 10, followed by the non-farm payroll data released on December 16, which has been delayed, and the CPI data on December 18. Additionally, it is worth noting that there are essentially no level one economic data releases between now and the FOMC meeting date, so the market's nearly 100% expectation of a Federal Reserve rate cut has been largely priced in (as the Federal Reserve typically does not like to let market expectations be unexpectedly unmet). The focus will be on the guiding language regarding the policy path for 2026, rather than the rate decision itself. Specifically, we will focus on how the Federal Reserve comments on its increased confidence in the easing of inflation pressures, justifying the “dovish rate cuts” in relation to the weak labor market and tightening market conditions, and vice versa. The minutes will also examine how many participants leaned towards maintaining rates unchanged as a dissent, especially in the context of the upcoming NFP and CPI reports. At the same time, Powell's responses during the Q&A session regarding the inflation gap and unemployment gap will also be noteworthy. As the meeting approaches, we will provide a more detailed interpretation of the Federal Reserve meeting.

Good luck, and may your trades go smoothly!