Last Week’s Summary
- S&P 500 Index rose 0.24%
- International Equities fell 0.02%
- Emerging Markets fell 0.70%
- U.S. 10-Year Treasury Yield rose to 4.22%
- Initial Jobless Claims rose to 220k
- ADP Employment Change fell to 103k
- Change in Nonfarm Payrolls rose to 199k
- Unemployment Rate fell to 3.7%
What to Watch for This Week
- M, 12/11/23 NY Fed 1-Yr Inflation Expectations
- T, 12/12/23 CPI, CPI Core
- W, 12/13/23 FOMC Rate Decision, PPI, PPI Core
- Th, 12/14/23 Initial Jobless Claims
- F, 12/15/23 Empire Manufacturing, S&P Global US Manufacturing PMI
Weekly Market Recap
A duo of robust economic indicators sent ripples through the markets on Friday, sparking a resurgence in stocks fueled by optimism that the United States may sidestep an impending recession. Despite a series of data pointing to a slowdown in the labor market, Friday’s jobs report unveiled unexpected strength.
Nonfarm payrolls surged by 199,000 last month, concurrently driving the unemployment rate down to 3.7%, while monthly wage growth surpassed expectations. Simultaneously, early December witnessed a sharp rebound in U.S. consumer sentiment, surpassing all forecasts, as households notably revised down their year-ahead inflation expectations by the most in 22 years.
The S&P 500 notched its lengthiest winning streak since November 2019, while the VIX, Wall Street’s “fear gauge,” retraced to pre-pandemic levels. U.S. two-Year Yields soared by 13 basis points to 4.72%, and swap contracts currently indicate a 40% probability of a March rate cut.
Despite softer inflation and employment figures in the past month, investors have shifted from anticipating further interest rate hikes to speculating on cuts of at least 125 basis points within the next 12 months.
As the market braces for another active week, attention is focused on upcoming readings for the U.S. Consumer Price Index and retail sales, along with the Federal Reserve’s final meeting of the year. Money-market funds experienced their highest inflows since March, while U.S. equities continued an eighth consecutive week of inflows.
Oil rebounded on the back of a stronger-than-expected U.S. jobs report and plans to replenish the Strategic Petroleum Reserve, however concerns about an imminent global glut led to the longest weekly losing streak in oil since late 2018.
Download Market Snapshot December 11, 2023
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