The final trading month of 2024 begins next week, promising a final push to the finish line to make this year’s Monster Rally a historic one. Employment reports are also on deck. The stock is at or near all-time highs, and as far as investors are concerned, there doesn’t seem to be any reason it can’t go higher, at least in the short term. The market may be expensive and sentiment may be frothy, but upbeat investors point to a strong macroeconomic backdrop and rosy earnings growth forecasts to justify prices. Seasonally speaking, the situation is favorable for stock prices. According to Sam Stovall, chief investment strategist at CFRA Research, December is the strongest month of any year for the S&P 500 index and also promises to have the lowest volatility of any month on the calendar. There is. He said data dating back to 1945 shows that the S&P 500 rose an average of 1.6% during the same month, with prices increasing more than three-quarters of the time. “It’s like coming out of Santa Claus and saying, ‘For the December Dasher,'” Stovall said. Because December will be rushing forward as usual. The S&P 500 index is already up 26% year-over-year, and a typical December gain could put 2024 among the best years on record. Over the past 50 years, the S&P 500 index has risen more than 27% in just six years, according to FactSet. But investors will have to deal with next month’s slew of economic data and uncertainty surrounding the next administration’s policies. “You can’t really time the market at a valuation like that, but I think you’re saying to yourself, do I really want to back up the truck right now?” Stovall said. “We will probably have to experience at least a correction in time, which means the market will stall until earnings and sales improve, or there will be a price correction until prices fall to more normal valuations. ” The Dow Jones Industrial Average exceeded $44,000 for the first time this month, and the S&P 500 index also exceeded $6,000 for the first time. All three major averages are less than 1% from their record highs. On Friday, all three major averages rose more than 5% for November, capping a strong month of gains. November jobs report The November jobs report will be released next Friday, which will be the last major survey of the labor market before the Fed’s Dec. 17-18 meeting, so it will be important to note that next month’s interest rate That means it’s important for investors to chart the future direction of and beyond. Investors are hopeful that an optimistic report showing solid growth, despite some signs of cooling in the labor market, will put the Fed on track to continue easing. According to FactSet consensus estimates, the November report expects the U.S. economy to add 177,500 jobs this month, up from 12,000 in the October report. However, this number is largely ignored by the market as “noisy” considering the weather anomalies in the data. The unemployment rate is expected to rise to 4.2% from 4.1% previously, according to FactSet consensus estimates. This could increase confidence in a December rate cut. Market expectations for a rate cut at next month’s meeting have waned in recent days, but this week’s inflation report and gross domestic product data suggest the central bank could cut rates next month. Expectations are rising again. According to the CME FedWatch Tool, the market is currently pricing in about a 67% chance of a quarter-point rate cut at the December meeting. Elsewhere next week, there will be several earnings reports from enterprise software giant Salesforce and discount stores Dollar General and Dollar Tree. Week Ahead Calendar All Time (ET). Monday, December 2nd 9:45am S&P PMI Manufacturing Final (November) 10am Construction Expenditures (October) 10am ISM Manufacturing (November) Tuesday, December 3rd 10am JOLTS Jobs (October) Revenue: Salesforce December 4th 8:15am ADP Employment Survey (November) 9:45am PMI Comprehensive Final Value (November) 9:45 a.m. S&P PMI Service Final (November) 10 a.m. Endurance Order (October) 10 a.m. Factory Order (October) 10 a.m. ISM Service PMI (November) Afternoon 2pm Fed Beige Book Earnings: Campbell Soup, Hormel Foods, Dollar Tree Thursday, December 5th 8:30am Unemployment Insurance Continuation Claims (11/23) 8:30 AM First Billing (11/30) 8:30 AM Trade Balance (October) Revenue: Ulta Beauty, Hewlett Packard Enterprise, Dollar General, Kroger Friday, December 6th 8:30 AM November Employment Report 10am Michigan Sentiment Bulletin (December) 3pm Consumer Credit (October)
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Outlook from December 2 to 6, 2024
