Last Week’s Summary
- S&P 500 Index rose 0.99%
- International Equities rose 1.73%
- Emerging Markets rose 2.47%
- U.S. 10-Year Treasury Yield fell to 4.15%
- Initial Jobless Claims stayed at 224k
- ADP Employment Change fell to 146k
- Nonfarm Payrolls rose to 227k
- Unemployment Rate ticked up to 4.2%
- U. of Mich. Sentiment rose to 74
What to Watch for This Week
- M, 12/9/24 Wholesale Inventories MoM
- T, 12/10/24 Nonfarm Productivity
- W, 12/11/24 MBA Mortgage Applications, CPI, CPI Core
- Th, 12/12/24 PPI, PPI Core, Initial Jobless Claims
- F, 12/13/24 Import Price Index
Weekly Market Recap
The world’s largest stock market surged to new all-time highs as U.S. jobs data fueled expectations of a Federal Reserve rate cut in December. Equities extended their rally this week, with the S&P 500 achieving its 57th record close of 2024.
The Index is up nearly 30% year-to-date, on track for its strongest annual performance since 2019. Shorter-dated Treasuries, which are more sensitive to near-term policy shifts, outperformed longer maturities.
Meanwhile, swap traders assigned an 80% probability to a quarter-point rate cut at the Fed’s December meeting. U.S. hiring showed modest improvement, while the unemployment rate ticked up slightly, signaling a cooling labor market without significant deterioration.
The uptick in unemployment could pave the way for a December rate cut, although the Fed might hold rates steady in January unless inflation data show meaningful deceleration.
While the labor market report moved the Fed closer to easing, it stopped short of making a December cut certain. The final decision will likely hinge on key inflation figures due next week.
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