The Investor Guide to Fidelity Funds for December 2023 is AVAILABLE NOW! December Data Files Are Posted Below Market Perspective Stocks Rally as 2023 Comes to End Equities rebounded strongly in […]
The first full week of December saw the release of this month’s nonfarm payroll figures and this month’s Job Openings and Labor Turnover Survey (JOLTS). In addition to important releases in the United States, inflation data was released in China and Switzerland while the central banks in Australia and Canada made interest rate decisions.
On Tuesday, the JOLTS report found that there were 8.73 million job openings in the United States. This was well below the 9.31 million openings forecast prior to the release, and it was also well below the 9.35 million openings from last month. It was the lowest number recorded since May 2021 when there were 8.12 million jobs available.
Tuesday also saw the release of the ISM Services PMI, which came in at 52.7 percent. The figure was slightly higher than the 52.2 percent forecast prior to the news release, and it was about a percentage point higher than last month’s survey. This indicates that demand for services is still healthy, which could be a sticking point as it relates to inflation.
On Wednesday, the ADP Nonfarm Employment change figure was released, and during the last month, employers added 103,000. Analysts thought that employers had added 131,000 jobs in the past 30 days. On Thursday, it was revealed that there were 220,000 unemployment claims, which was almost identical to what analysts had expected prior to the release.
Friday saw the Bureau of Labor Statistics (BLS) release its own nonfarm payroll figures. It found that employers had added 199,000 jobs in the past month. It was also revealed that average earnings were up .4 percent monthly while the unemployment rate dropped to 3.7 percent.
Also on Friday morning, the University of Michigan released its consumer confidence and inflation expectation reports. Consumer confidence rose to 69.4 percent in December while inflation expectations dipped to 3.1 percent from 4.5 percent last month.
The Dow 30 had a relatively flat week finishing up .42 percent to close at 36,247. The market put in a low on Tuesday at 36,029. Barring a major disaster, the market is poised to finish the year in positive territory as it is currently up more than 7 percent in 2023.
The Nasdaq was up 251 points to close at 16,084 for the week, a gain of 1.59 percent. The market made its low for the week on Monday when it dipped to 15,711 and never looked back as it would close at its weekly high on Friday. For the year, the Nasdaq is up 38.21 percent.
Finally, the S&P 500 finished the week up .81, to close at 4,604. It made a weekly low of 4,546 on Wednesday and would hit its high of the week on Friday afternoon. As with the other two major indices, the S&P 500 is on track to close the year in the black as it’s currently up 16 percent in 2023.
Oil broke below $70 on Thursday as it made a low of $69.53 for the week before rebounding to close at $71.93 on Friday. This continues a trend toward the lows of the year after making a high of $94.18 a barrel in September. Oil hit its lowest point of the year in May when it dipped just below $65.
Gold was volatile as it hit a high of more than $2,125 on Monday before falling to $1,997 per ounce by Friday morning. It would also rebound from its weekly low to finish the week at $2,004. The weekly high of $2,135 also represented a yearly high for the commodity that is typically seen as a safe haven during periods of political or economic uncertainty.
This upcoming week is going to be another eventful one for traders as a variety of news reports will be released. Tuesday sees the release of December’s inflation report in the United States while price data will be released to the public on Wednesday. Also on Wednesday, the FOMC will be making its latest interest rate decision. Retail sales data is expected to be released on Thursday.
Analysts expect inflation to be 3.1 percent on an annualized basis, that the FOMC will keep rates steady and that retail sales have declined by .1 percent on a monthly basis. It’s also expected that prices will have risen by .1 percent monthly.
The final week of November was eventful, both domestically and internationally. In the United States, the news began to come fast and furious on Tuesday morning as the Consumer Board (CB) released its latest consumer confidence figures. Over the past month, confidence increased from 99.1 to 102, which was a full point higher than analysts expected prior to the release.
The Richmond Manufacturing Index was also released on Tuesday and came in at a negative five. Analysts had expected the final tally to be one, which was still two points lower than last month’s figure of three. Finally, FOMC member Waller was among many to speak on Tuesday, and he said that rate cuts were conceivable if economic trends continued to show inflation coming down.
On Wednesday, preliminary gross domestic product (GDP) figures were released. During the third quarter, the economy grew by an estimated 5.2 percent, which was higher than the 4.9 percent predicted prior to the release.
Thursday saw another slew of data released including unemployment claims and the PCE Price Index. Unemployment claims rose to 218,000 compared to 211,000 a week ago while the PCE Price Index came in at an increase of .2 percent compared to last month.
Friday saw the release of the ISM Manufacturing Prices and ISM Manufacturing PMI data. The ISM Manufacturing PMI came in at 46.7 percent while the ISM Manufacturing Prices report came in at 49.9 percent. Also on Friday, Fed Chair Jerome Powell made remarks at two different events. During the morning event, he said that further tightening could be warranted. He also said that inflation could get back down to 2 percent without the need for a significant loss of jobs.
Internationally, Australia reported on Tuesday night that its inflation rate dipped to 4.9 percent on an annualized basis. In Germany, inflation dropped by .4 percent monthly while inflation also eased in Spain falling .4 percent to 3.2 percent on an annualized basis. Lower inflation figures were also reported in Italy and France this week, and throughout the Eurozone, inflation was 3.6 percent annually.
The Dow had another strong week as it would gain more than 2 percent to close at 36,245. It would make its low of the week on Monday afternoon at 35,306 and would continue to climb for the next four trading days making a high of 36,250 on Friday afternoon.
The S&P 500 would also finish in the black for the week but would achieve more modest gains. For the week, the market was up .78 percent to close at 4,594. It would make an initial low of the week on Tuesday at 4,544 that would be taken out on Thursday when the market hit 4,540. The market made an early high on Wednesday at 4,587 that was taken out on Friday when the market hit 4,595.
Finally, the Nasdaq would also remain mostly flat for the week gaining .35 percent to finish at 14,305. It made a high on Wednesday reaching 14,421 while making it’s low on Friday morning when it dropped to 14,142.
Oil had another volatile week making a high of about $80 on Wednesday before making a low of $74.38 on Friday. For the month, oil prices stayed in a tight range amid concerns about the conflict in Israel and how it might affect global oil supply and demand.
On Tuesday, the Job Openings and Labor Turnover Survey (JOLTS) report will be issued while unemployment claims data is scheduled for release on Thursday. Nonfarm payroll numbers will be released on both Wednesday and Friday, and these reports tend to lead to increased volatility in the markets.
The November Issue of the ETF Investor Guide is AVAILABLE NOW! Links to the November Data Files have been posted below. Market Perspective: Corporate Earnings Remain Strong Equities rebounded in […]
The Thanksgiving holiday resulted in relatively subdued markets in the United States. However, there were a few significant developments. On Tuesday, the minutes from the November FOMC meeting were released and provided some insight into what Fed officials are thinking.
According to those minutes, it’s unlikely that the Fed will move to cut rates anytime soon. Although inflation has dropped to 3.2 percent on an annual basis from 9 percent last year, it is still well above the central bank’s goal of 2 percent. There is some worry that strong GDP growth could result in inflation that is stubborn or accelerates. It’s unclear whether the Fed would actually raise rates further as it has been suggested that peak interest rates are already in place.
The Fed will meet again in December with most analysts believing that the Fed Funds Rate will remain in a range between 5.25 percent and 5.5 percent. In addition to the Fed minutes, a slew of data was released on Wednesday. For instance, there were 209,000 claims for unemployment benefits this week compared to a forecast of 226,000.
The revised University of Michigan Consumer Sentiment report showed that sentiment was at 61.3 percent compared to a forecast of 61.1 percent. Inflation expectation for the year increased slightly to 4.5 percent compared to 4.4 percent last month.
Finally, on Friday, S&P Global released its Flash Manufacturing and Flash Services PMI. The manufacturing index came in at 49.4 while the services index came in at 50.8. These figures suggest that manufacturing is experiencing a minor contraction while the service sector is continuing to expand, which is in line with what has been happening in recent months. It is widely known that inflation and GDP figures have been buoyed by increased spending on services during the summer and fall of 2023.
The Dow spent most of the week in a stair step pattern as it would make new highs, consolidate and then continue moving to the upside. On Monday, the market opened at 34,936, which was also the low point of the abbreviated week. It would make a high of 35,389 on Friday morning before easing back to close the session. The Dow would finish the week up about 1 percent and is up 3.3 percent for the year.
The Nasdaq would spend most of the week in a narrow trading range. On Tuesday, the market made its low of the week at 14,154 and made a high of the week on Wednesday when it reached 14,355. Over the course of the last five trading days, the Nasdaq gained 140 points or 1 percent. For the year, the market is up 26.19 percent.
Finally, the S&P 500 would gain roughly 1 percent to finish the week at 4,555. On Monday, the market opened at 4,520 and would not give anything back for the rest of the week. It would make its weekly high of 4,561 on Wednesday afternoon. For the year, the S&P is up 528 points or 13.11 percent.
The upcoming week is poised to have significantly more volatility as traders are eager to get back to work after the holiday. On Tuesday, the Consumer Board (CB) Consumer Confidence report is issued while Wednesday sees the release of the initial GDP numbers for the previous quarter. Analysts expect that the economy expanded by 5 percent in the previous three months. Unemployment claim data will be released on Thursday while manufacturing price data will be released on Friday. Federal Reserve Chairman Powell will also speak on Friday afternoon, which always has the potential to move markets.
Traders may also want to keep an eye out for inflation and GDP announcements coming from Canada, Australia and Europe. It’s not uncommon for an uptick in inflation or economic growth elsewhere in the world to have an impact on what the Fed might do. Therefore, understanding what is happening internationally may provide traders with insight as to how to best manage their own portfolios.
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