The first week of December saw stocks close higher. Megacaps fueled much of the increase. A better-than-expected jobs report encouraged trader sentiment about a soft landing for the economy, while cooling expectations of an early cut in interest rates by the Federal Reserve. All of the major benchmark indexes ended last week higher, with the exception of the Global Dow. Several market sectors advanced, led by consumer discretionary, real estate, industrials, communication services, and information technology. Energy, consumer staples, and materials lagged. Ten-year Treasury yields rode a wave of ebbs and flows during the week, ultimately closing about where they began. A late-week rally wasn’t enough to keep crude oil prices from falling for the sixth straight week. The dollar edged higher, while gold prices declined.
Last Week’s Economic News
- According to the latest jobs report from the Bureau of Labor Statistics, there were 199,000 new jobs added in November, up from 150,000 new jobs added in October. Nevertheless, employment growth was below the average monthly gain of 240,000 over the prior 12 months but is in line with job growth in recent months.
- Job Openings and Labor Turnover Summary shows the number of job openings decreased 617,000 to 8.7 million in October.
- The latest (October) report on international trade in goods and services was released this past week showing goods and services deficit was $64.3 billion, up 5.1% from the previous month. Exports fell 1.0%, while imports rose 0.2%. Year to date, the goods and services deficit decreased $161.4 billion, or 19.8%, from the same period in 2022. Exports increased $28.0 billion, or 1.1%. Imports decreased $133.4 billion, or 4.0%.
- Business activity in the services sector expanded marginally in November based on the S&P Global US Services PMI Business Activity Index.
- The national average retail price for regular gasoline was $3.231 per gallon on December.
- For the week ended December 2, there were 220,000 new claims for unemployment insurance, a slight increase from the previous week’s level, which was revised up by 1,000.
Eye on the Week Ahead
There’s plenty of important data being released this week. The Federal Open Market Committee meets for the last time this year. The FOMC hasn’t increased interest rates since July, however they have left the door open for more rate hikes should inflation reverse course and accelerate. Speaking of inflation, several inflationary indicators are out this week. The Consumer Price Index for November is available. The CPI was unchanged in October and saw its annual rate drop from 3.7% to 3.2%. The Producer Price Index, also out this week, fell 0.5% in October.
Have a nice week!
Sincerely,
Robert G. Carpenter