Stocks averages at record highs ahead of US Jobs data

Macroeconomic/ geopolitical developments

• U.S. stocks surged during a holiday-shortened week, with the Dow and S&P 500 closing at record highs and posting their best monthly gains of 2024, driven by robust corporate earnings, strong sectoral performance, and investor optimism amid global mixed market trends.
• The Federal Reserve’s preferred inflation gauge, the PCE price index, rose by 0.2% in October, with annual headline inflation at 2.3% and core inflation at 2.8%, both meeting forecasts and reflecting stable price pressures above the Fed’s 2% target.
• The Biden administration plans to announce revised export restrictions on semiconductor equipment and AI memory chips to China, with a narrower scope than initially proposed, following negotiations with allies and industry lobbying, though tensions with China persist.
• Key economic releases, including the US November jobs report expected to show a rebound to 202,000 jobs and global PMI surveys, will shape market expectations and Federal Reserve policy decisions ahead of its December meeting, amid divided views on rate cuts and inflation risks.

Global financial market developments

• US and global equity averages extended still higher, with the DJIA and S&P 5000 at record levels
• US and European bonds moved to notably lower yields on the week, particularly in Europe.
• The US Dollar Index corrected notably lower after robust gains so far in Q4.
• Gold futures sold off early last week, before staging a modest bounce.
• Oil futures were down slightly, but stayed in a broader consolidation mode.

Key this week

Central Bank Watch: Central bank activity is very modest this week. Key focus will be on the speeches from the Fed members.

Macro Data Watch: The main macro data releases this week are the Global PMI on Monday and Wednesday and the US Employment Data on Friday. Some other releases of note are US Factory Orders Wednesday, EU Retail Sales Thursday and EU GDP on Friday.

Steve Miley (The Market Chartist)

Editor in chief

Steve Miley is the Market Chartist and has 32 years of financial market experience and as a seasoned expert now has many responsibilities. He is the founder, Director and Primary Analyst at The Mar... Continued