Market Analysis: Stock Market Reaction to US GDP News

According to data released yesterday, the US economy is growing at a stronger pace than expected. Thus, US GDP in the 3rd quarter increased by 5.3% in annual terms (an increase of 4.9% was expected).

Combined with softening rhetoric from the Federal Reserve, this is a positive signal for US stock markets, which have shown impressive performance: in November, the S&P 500 and Nasdaq Composite indices rose by 8.5% and 11%, respectively (the final figure will be known later, since today – last day of the month), which is the best month since July 2022.

Against the background of this news, the S&P 500 index yesterday rose closer to the highs of the year. However, the chart shows that the November rally may not continue into December. Note:

→ Most of November's progress was achieved in the first half of the month. In the second half, growth slowed down, as evidenced by the change in the angle of inclination of the purple channel relative to the blue channel.

→ Level 4,575 effectively provides resistance.

→ After the formation of yesterday’s top (against the backdrop of news), sellers were able to sharply lower the price - thus forming a false breakout of the 4575 level.

Of course, the upward trend has not yet been formally broken - the market may find support from the median line of the ascending channel and then try to set the year's high for the S&P 500. But it seems that the price is already taking into account all possible positive influence factors. And if any negative factors arrive, this will lead to a correction in November growth.

By the way, JP Morgan analysts released their forecast that the price of the S&P 500 will fall to 4200 next year amid a “challenging macroeconomic backdrop.”