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The past week brought inflation data for November and the Fed’s interest rate decision. More importantly, the Fed seems to be pivoting to the idea that rate cuts are on the horizon in 2024.

On Tuesday, the first important news release took place as the CPI report for November was made available to the public. On a yearly basis, inflation dropped .1 percent to 3.1 percent, which was exactly what analysts predicted. However, on a monthly basis, inflation went up .1 percent whereas analysts had expected it to remain flat. Core CPI was up .3 percent for the month, which is what experts had predicted.

Although the Fed’s rate decision Wednesday afternoon was the main event for the week, it was not the first report released that day. Wednesday morning saw the release of the Producer Price Index (PPI), which found that prices remained flat for the previous month. Furthermore, it found that core PPI was also flat, despite the belief that it would go up .2 percent.

As expected, the Fed did not raise rates. In remarks made after the decision was released, Fed Chair Jerome Powell said that recent data showed a path to sustainable reductions in inflation over the next several months. He also mentioned that there was a possibility of rate cuts starting in March 2024.

Of course, there was some pushback on that idea by other Fed members, but it did mark a significant change in tone by the central bank. Over the past several months, the Fed has stood by the assertion that decisions would be driven by data and that rate increases were still possible. Ultimately, this relatively dovish stance is an indication that the worst may be over and that risks are shifting from being too accommodating to being too restrictive.

Ironically, this could create another temporary round of inflation as markets respond positively to the news. In anticipation of rate cuts, investors, businesses and consumers may start to pour money back into the market.

On Thursday, it was revealed that retail sales were up .3 percent as opposed to down .1 percent as analysts had expected. It was also announced Thursday morning that unemployment claims were down to 202,000 from 219,000 a week ago. This could mean that there is still upward price pressures being placed on the market. Of course, the uptick in job creation could also be a result of the holiday season and the temporary labor most companies add this time of year.

On Friday, the Empire State Manufacturing Index came in at -14.5, which was well under the positive two expected by analysts. The Flash Manufacturing PMI was also lower this month coming it at 48.2 compared to 49.4 in October.

The Dow was up 2.58 percent to close at 37,319, which is both a yearly and all-time high for this market. It would make a low of the week on Monday when it opened at 36,274 and would simply continue to rise during the next four trading days. For the year, the Dow is up 12.41 percent or 4,110 points.

The S&P 500 was also up this week by 2.5 percent to finish at 4,723. As with the Dow, the S&P 500 made its low of the week on Monday and would spend most of the week climbing to new highs. It would make its high of the week on Thursday when it hit 4,732. For the year, the S&P is up 21 percent or 828 points.

Finally, the Nasdaq was up 3.2 percent to finish at 14,831. As with the Dow, it would make a low on Monday of 14,347 before reversing and spending the rest of the week making new highs. The Nasdaq made its high of the week on Thursday at 14,840. For the year, the Nasdaq is up a whopping 37 percent.

The upcoming week is certain to be busy at it is the final full week before the Christmas and New Year’s holidays. The final gross domestic product (GDP) figures for the previous quarter are due on Thursday along with unemployment claims for the previous week. In addition, the Consumer Board and the University of Michigan are set to release consumer confidence reports on Wednesday and Friday, respectively. Finally, monetary policy statements and inflation figures are set to be released by central banks in Australia and Japan on Monday, Canada on Tuesday and Great Britain on Wednesday.

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.