Market Perspective for December 10, 2023

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.

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