What happened in the markets: 4 Dec - 8 Dec 2023
What a way to end the week! The markets closed higher on Friday, with the S&P 500 and Nasdaq Composite reaching their highest closing levels since the early days of 2022. That's six straight weeks of gains, folks! 📈
The Dow Jones Industrial Average decided to play it cool and finished pretty much where it started, but hey, we're not complaining.
Last week at a glance
📊 The jobs report - The Labor Department dropped some fresh stats, showing that November added a neat 199,000 jobs on a seasonally adjusted basis. This kind of solid report suggests that the Federal Reserve might just keep those interest rates steady at the upcoming meeting.
👔 Unemployment & the economy - Unemployment dipped to 3.7%, and with payrolls and earnings on the rise, it's painting a picture of an economy that's gracefully skating towards a soft landing. Recession? Doesn't look like it's on the agenda right now.
For the week, the Nasdaq got a 0.7% boost, the S&P 500 went up by a modest 0.2%, and the Dow Jones kept its balance and finished flat.
🏦 Fed's next move - All eyes are now on the Federal Reserve's last monetary policy committee meeting of the year, happening next week. The market's betting on the Fed to play it safe and keep rates on hold.
Why is this important? A strong jobs report coupled with a steady unemployment rate gives the Fed some room to breathe and suggests that the economy might be more resilient than some fear-mongers suggest. It's a delicate dance between keeping inflation in check and not slamming the brakes too hard on economic growth.
📈 Nasdaq hits a high note - The tech-heavy Nasdaq Composite is singing a high tune, hitting its highest closing level in quite some time. Investors seem to be vibing with tech stocks again, and who can blame them?
📉 Dow Jones stays steady - The Dow Jones Industrial Average is the cool kid at the party, not making a scene and staying pretty much flat for the week. Stability can be a good thing, right?
Top movers & shakers🎢
Here's a roundup of the latest stock movements driven by quarterly earnings, analyst ratings, and other market news:
Apple (AAPL) saw a 1% rise, inching closer to an all-time high and reclaiming a market capitalization above $3 trillion. Reports of Apple and its suppliers working to ramp up iPhone production in India contributed to the positive momentum.
Honeywell (HON) experienced a 1.6% decline following its $4.95 billion all-cash acquisition of Carrier Global's (CARR) Global Access Solutions business, aimed at bolstering its Building Technologies segment.
Lululemon (LULU) rallied over 5% after surpassing earnings expectations, despite conservative guidance. Analysts noted the company's strong performance and raised price targets accordingly.
MGM Resorts (MGM), Las Vegas Sands (LVS), and Caesars Entertainment (CZR) all recorded solid gains, buoyed by higher-than-expected job gains and increased hourly wages, signaling potential consumer spending in the entertainment sector.
Paramount (PARA) surged 12% on reports of potential acquisition discussions, which could lead to significant changes within the media conglomerate.
RH (RH) tumbled nearly 14% after disappointing Q3 earnings, attributed in part to a 14% year-over-year sales drop influenced by high mortgage rates.
Looking ahead, next week's earnings spotlight will be on tech leaders Oracle (ORCL) and Adobe (ADBE), with both companies expected to report their results. Oracle and Adobe shares have seen substantial gains this year, climbing 40% and 81% respectively. Stay tuned for updates!
What else is making headline news📰
The jobs report sends stocks higher, but the Dow stays put.
Markets anticipate the Fed's rate decision in the upcoming policy meeting.
Gold's new peak and bitcoin's leap
On the commodities front, spot gold prices soared to a shiny new record of $2,100 on Monday, while bitcoin broke through the $44,000 mark on Tuesday, hitting its highest level since the spring of 2022. Analyst Clif Droke chimed in, saying, "Continued military tensions in the Middle East and Eastern Europe, recession whispers, and the prospect of lower rates are making gold the belle of the ball for higher prices in the coming months." Bitcoin's surge seems to be riding the wave of anticipation for ETFs tracking the top crypto, with the SEC's blessing potentially coming as soon as next month. Crypto-related stocks like Coinbase (COIN), Marathon Digital (MARA), and Riot Platforms (RIOT) were also seen dancing to the rally tune.
Energy's slippery slope
Energy prices, on the other hand, have been on a slippery slope, with West Texas Intermediate crude oil sliding down 22% this quarter. The average price at the pump in the US has also taken a tumble, dropping 16% to $3.21 a gallon. The US is pumping out crude like there's no tomorrow, even outpacing Russia and Saudi Arabia. OPEC's been feeling the heat and has tried to cool things down with output cuts, but the oil bulls aren't buying it, and it's even causing a bit of a family feud within OPEC+.
Budget battles and defense dilemmas
Meanwhile, over on Capitol Hill, the piggy bank for foreign policy priorities is running on empty, stirring up a national security storm. The tug-of-war continues over funding for Ukraine, immigration policies, and the legislative lasso needed to wrangle these bills into law. The White House is waving the red flag, cautioning that without a cash injection from Congress, the US won't be able to restock Ukraine's arsenal or dip into its own military supplies.
Defense giants like Lockheed Martin (LMT), Raytheon (RTX), and Northrop Grumman (NOC) had a field day in 2022 post-Russia's Ukraine invasion, but this year, they've lost a bit of their firepower for various reasons.
The week ahead: 11 Dec -15 Dec 2023
Last FOMC meeting of the year [12-13 Dec]
Investors will have their eyes on the last Federal Reserve meeting of the year next week. While the FOMC is expected to maintain steady rates, market watchers will be keenly interested in the tone set by Jerome Powell and the committee. Currently, the Fed's preferred inflation measure, core PCE inflation, appears to be on track to end the year comfortably below the central bank's forecast and not too far off the Fed's 2% target. Apart from the Fed meeting, the economic calendar also includes the consumer price index and producer price index reports, as well as updates on retail sales and industrial production.
Earnings
As the earnings calendar finally slows down, notable reports from Oracle (ORCL), Costco (COST), and Darden Restaurants (DRI) will stand out. Key corporate events during the week will include the 65th American Society of Hematology conference in San Diego, California, Chewy's (NYSE:CHWY) inaugural investor day event, and AI-related announcements from Intel (INTC).
Monday, December 11 - Casey's General Stores (CASY) and Oracle (ORCL).
Tuesday, December 12 - Johnson Controls International (JCI).
Wednesday, December 13 - Adobe (ADBE) and ABM Industries (NYSE:ABM).
Thursday, December 14 - Costco (COST), Jabil (JBL), and Lennar (LEN).
Friday, December 15 - Darden Restaurants (DRI).
Dividend watch
Companies expected to increase their quarterly dividend payouts include ABM Industries (ABM) to $0.24 from $0.22, WD-40 (WDFC) to $0.89 from $0.83, American Tower (NYSE:AMT) to $1.70 from $1.62, and WEC Energy (WEC) to $0.83 from $0.78.
Events
The headline event on the corporate calendar is Intel's (INTC) AI Everywhere Event. The semiconductor giant has announced that the event will feature the launch of 5th Gen Intel Xeon processors for data centers and Intel Core Ultra processors for laptops. Other events that could impact share prices include AECOM's (ACM) Investor Day, Affirm Holdings' (AFRM) Investor Meeting, L3Harris Technologies' (LHX) Investor Day, Centene's (CNC) Investor Day event, Couchbase's (BASE) Analyst Day, U.S. Silica Holdings' (SLCA) Investor Meeting, and Chewy's (CHWY) inaugural investor day event in the company's history.
Conferences
The healthcare sector will be on high alert with the 65th American Society of Hematology conference taking place in San Diego, California. The Hematology meeting has historically led to share price movements from participants. Arcellx (ACLX) and Pfizer (PFE) have been highlighted as two companies to watch. Other presenters of data include Eli Lilly (LLY), Agios Pharmaceuticals (AGIO), Corvus Pharmaceuticals (CRVS), IN8bio (INAB), Molecular Partners AG (MOLN), Rigel Pharmaceuticals (RIGL), Schrödinger (SDGR), Telomir Pharmaceuticals (TELO), Vor Biopharma (VOR), CRISPR Therapeutics (CRSP), Shattuck Labs (STTK), Bristol-Myers Squibb (BMY), and Incyte Corporation (INCY). Other conferences that could generate news include the Seaport Digital Media & Advertising Virtual Conference, New Street Research BCG Future Series Conference, and Northland Capital Markets Virtual Artificial Intelligence Investor Conference.
Sources:
https://seekingalpha.com/article/4657009-wall-street-breakfast-what-moved-markets
https://seekingalpha.com/article/4657027-wall-street-breakfast-week-ahead
https://www.edwardjones.com/us-en/market-news-insights/stock-market-news/stock-market-weekly-update
https://www.schwab.com/learn/story/schwab-market-update
*Disclaimer: This information is provided for general information purposes only. Consider your investment objectives, financial resources and other relevant circumstances carefully before investing. This is not an invitation or an offer to invest, nor is it financial advice or a recommendation to buy or sell any investment.
