Weekly Market Commentary December 2nd to December 6th 2024
It was a busy week for economic data, but none more important than the November employment report on Friday.
The ISM Manufacturing report kicked off the week, increasing 1.9 percentage points to 48.4%, in contractionary territory (below 50) for an eighth consecutive month. Overall, the pace of contraction slowed in November with new orders and new export orders increasing in the month, while order backlogs and supplier deliveries declined.
On Tuesday we got a prelude to the employment report with the Bureau of Labor Statistics releasing its Job Openings and Labor Turnover Survey (Jolts) for October totaling 7.7 million, surprising to the upside and up from a nearly four-year low posted in the previous month. There are 1.11 job openings for every unemployed person, below the 2022 peak of 2.03 and the pre-Covid pandemic level of 1.2.
Thursday delivered insight into services activity with the ISM Services Index, which decreased 3.9 percentage points from October to 52.1. Only two of the ten sub-indexes expanded, with new orders, employment, and business activity leading the declines.
Wrapping up the week was the most anticipated economic data from the Bureau of Labor Statistics and came in higher than forecasted. Non-farm payrolls increased 227k in November, above the 220k estimate, while the prior two months were revised down by a considerable 112k. Lastly, the unemployment rate increased 0.1% to 4.2%. The report showed stabilization of the labor market after storms and a strike negatively impacted the previous month and likely gives the Federal Reserve more leeway to cut rates in December.
The S&P 500 opened the week at 6,032, and closed at 6,090, up about 1% for the week and a new all-time high. In the U.S. Treasury market, the 2-Year U.S. Treasury declined by 0.07 percent to 4.09%, while the 10-Year U.S. Treasury closed at 4.15% down 0.06 percent from the prior week.
Key economic releases next week include the producer (PPI) and consumer (CPI) price indices.
