By Bill Hornbarger, Chief Investment Officer
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Three Things to Watch
- The jobs situation will be front and center this week with the release of the November employment report on Friday. Nonfarm payrolls are expected to be up 180,000, with the end of the UAW and SAG-AFTRA strikes adding about 40,000 workers back into the employment data. The unemployment rate is forecast to remain steady at 3.9%, with a slight dip in hourly earnings to 4% year over year. A consensus number would be consistent with the soft-landing scenario and would argue that the U.S. Federal Reserve (Fed) is done raising rates or close to it.
- Friday will also feature the University of Michigan inflation expectations data. Both the one- and five-year readings have increased the past three months, which is a potential concern for the Fed. This month, both are expected to decline to 4.3% (one-year) and 3.1% (five-year). Rapidly increasing inflation expectations can have an impact on consumers’ attitudes and spending.
- Investors will be keeping a close watch out for the “Santa Claus” rally. December has been the second-best month for the S&P 500 since 1945 (average gain of 1.54%) and the month most likely to post a gain (77% of the time). So far, the seasonal trends have been strong in 2023. September (historically the worst months for stocks) saw the S&P 500 fall almost 5%. October saw heightened volatility, and November (a historically strong month) saw the index rally almost 9%.
Three Things to Know
- Thirty-one years ago this week, the first text message was sent. On December 3, 1992, a 22-year-old engineer named Neil Papworth used his PC to text “Merry Christmas” to a colleague. Papworth was part of a group within Vodafone that was developing a “Short Message Service Centre” (SMSC). The recipients were at a party and didn’t text him back. At the time, phones could only receive texts. So, instead, they used the phone and called him. Today, it is estimated that 23 billion text messages are sent per day. (Source: Bespoke Investment Group)
- On Sunday, Bitcoin traded above $40,000 for the first time since May 2022. The cryptocurrency is still well below its high of $67,700 set in November 2021. (Source: Bloomberg)
- November was the 18th-best monthly return for the S&P 500 since 1950 (8.9%). One year after the best 20 months, the index has been higher 80% of the time, with an average gain of 13.3%. (Source: @RyanDetrick)
The above information reflects the current opinion of the author. It is based upon sources and data believed to be accurate and reliable. Opinions and forward-looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security mentioned.