Weekly Market Update | Week 49, 2024


More All-Time Highs for the S&P and Nasdaq

Although the S&P 500 and Nasdaq both capped off the week with fresh record closes, Value, Mid-cap and Small-Cap closed lower for the week. Big Tech was the clear winner. The cap-weighted S&P 500 outpaced the equal-weighted index (RSP) by 230 bp, the most since July. Other outperformers included semis, software, EVs, athletic apparel, airlines, cruise lines, athletic apparel, and entertainment. Underperformers included industrial metals, parcels and logistics, road and rails, homebuilders, energy, banks, insurance, credit cards, telecom, and food and beverage. Treasurieswere a bit firmer with some curve steepening. The dollar index was up 0.3%. Gold was down 0.8%. Bitcoin futures were up 3.9%, hitting a record high last week after rising above $100K . WTI crude was down 1.2%

It was a fairly quiet week without much change to the broader narratives. Tech leadership was a key piece of this week’s upside, driven after a rotational drag in November, some tailwinds from tech earnings (CRM +9.7%, MRVL +22.5%, HPE +12.9%), and positive AI takeaways from the Amazon AWS conference. The resilient consumer narrative was also supported this week by spending commentary from Visa and Mastercard management (Mastercard also noted total Black Friday retail sales were up 3.4% y/y) and positive retailer earnings takeaways, including LULU +24.6%, KR -3%. This week also saw some dovish Fed repricing despite some mixed Fedspeak. Last week’s economic data also added support to the resilient macro narrative, including a November payrolls beat and ISM manufacturing the highest in six months. Other pieces of the bullish narrative included positive seasonality and minimal spillover from the week’s big global headlines (South Korea, France, and Syria).

Extended positioning and sentiment continue to be cited as overhangs, though UBS noted this week market sentiment reflects cautious optimism rather than euphoria, noting Mag 7 underperformance since July and minimal M&A and IPO activity. However, Citi said S&P futures positioning is completely one-sided, setting new highs for a fourth-straight week, while Goldman Sachs noted US equities have seen the biggest inflows on a 3m basis since 2021. Other pieces of the bearish narrative include some cautious takeaways from data, including a 355K decline in the NFP household survey and ISM services miss. Trump policy (tariffs, immigration, and debt/deficit dynamics) remains a key area of uncertainty, while reports noted taxes may take a backseat to border security this year given the minimal GOP advantage in the House (Washington Post). Amid the latest bout of Big Tech outperformance, BofA noted the concentration of S&P 500 market cap continues to push higher, sitting well above even peak 90s Tech Bubble levels.

November payrolls was the data highlight of the week. Headline payrolls of 227K came in above consensus 200K, though there was some disappointment prior two month revisions (+56K) weren’t even higher. There was also some concern around the weakening participation rate, prime-age employment-to-population ratio, and the six-month average payrolls trend falling to a cycle-low. Other data this week included October JOLTS job openings of 7744K, above consensus for 7465K and September’s downwardly revised 7372K (was 7443K). November ISM Services of 52.1 was down 3.9 points m/m, below consensus for 55.5, and the lowest in three months. However, November ISM manufacturing index of 48.4 was ahead of consensus for 47.5, the highest since April and the best m/m improvement since Aug-23.

Fed Chair Powell said Wednesday that with the economy in remarkably good shape, he feels very good about where the economy is and where monetary policy is, and that the Fed can afford to be a little more cautious as it tries to find neutral. The hawkish-leaning comments came after a dovish tone from Fed Governor Waller, who said Monday he’s leaning toward a December cut. Despite the mixed commentary, the odds of a 25 bp cut at the 18-Dec FOMC meeting rose to 90% this week, up from 65% a week ago.

Be on the lookout for an invite to our 2025 Outlook to be held Tuesday Jan 14th.

Fixed Income

Yield Curve


November FOMC Statement   November Minutes   Credit, Liquidity and Balance Sheet    Federal Reserve Dot Plots  

Treasury.gov yields    FOMC Policy Normalization Statement     Longer- Run Goals Jan 2024

Foreign Exchange Market

Energy Complex

The Baker Hughes rig count  rose by 7 last week. There are 589 oil and gas rigs operating in the US – Down 37 from last year.

Metals Complex  

Employment Picture  

November Jobs Report –  BLS Summary  Released 12/6/2024  –  The US Economy added 227k nonfarm jobs in November and the Unemployment rate edged up to 4.2%. Average hourly earnings increased 13 cents to $35.61.  Hiring highlights include +54k Healthcare, +33k Government, +53k Leisure and Hospitality, and +32k in Transportation.

  • Average hourly earnings increased 13 cents/0.4% to $35.61.
  • U3 unemployment rate increased 0.1% to 4.2%. U6 unemployment rate increased 0.1% to 7.8%.
  • The labor force participation rate was relatively unchanged at 62.5%.
  • Average work week increased 0.1 to 34.3 hours.

Weekly Unemployment Claims – Released Thursday 12/5/2024 – In the week ending November 30, the advance figure for seasonally adjusted initial claims was 224,000, an increase of 9,000 from the previous week’s revised level. The 4-week moving average was 218,250 an increase of 750 from the previous week’s revised average.

Job Openings & Labor Turnover Survey JOLTS – Released 12/3/2024 – The number of job openings was little changed at 7.7 million on the last business day of October, the U.S. Bureau of Labor Statistics reported. Over the month the number of hires and total separations was little changed at 5.3 million and 5.3 million, respectively. Within separations, quits (3.3 million) and discharges (1.6 million) changed little.

Employment Cost Index – Released 10/31/2024 – Compensation costs for civilian workers increased 0.8% for the 3-month period ending in September 2024. Wages and salaries increased 0.8% and benefit costs increased 0.8% from June 2024. The 12-month period ending in September 2024 saw compensation costs increase by 3.9. The 12-month period ending September 2023 increased 4.3%. Wages and salaries increased 3.9 percent over the 12-month period ending in September 2024 and increased 4.6 percent for the 12-month period ending in September 2023. Benefit costs increased 3.7 percent over the 12-month period and increased 4.1 percent for the 12-month period ending in September 2023. This report is published quarterly

This Week’s Economic Data- Blue links take you to data source

Consumer Credit  Released 12/6/2024 – Consumer credit increased at a seasonally adjusted annual rate of 4.5 percent in October. Revolving credit increased at an annual rate of 13.9 percent, while nonrevolving credit increased at an annual rate of 1.1 percent.

U.S. Trade Balance – Released 12/5/2024  –  The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced that the goods and services deficit was $73.8 billion in October, down $10.0 billion from $83.8 billion in September. October exports were $265.7 billion, $4.3 billion less than September exports. October imports were $339.6 billion, $14.3 billion less than September imports. The October decrease in the goods and services deficit reflected a decrease in the goods deficit of $10.4 billion to $98.7 billion and a decrease in the services surplus of $0.4 billion to $24.8 billion.

PMI Non-Manufacturing Index – Released 12/4/2024 – Economic activity in the services sector expanded in November for the fifth consecutive month indicating expansion in nine of the eleven months of 2024. The Services PMI® registered 52.1 percent 3.9 percent lower than October’s reading of 56.0 percent. 

U.S. Construction Spending– Released 12/2/2024 – Construction spending during October 2024 was estimated at a seasonally adjusted annual rate of $2,174.0 billion, 0.4 percent above the revised September estimate of $2,164.7 billion. The October figure is 5.0 percent above the October 2023 estimate of $2,071.1 billion.

PMI Manufacturing Index – Released 12/2/2024 – The November Manufacturing PMI registered 48.4 percent, 1.9 percent higher compared to October. The overall economy continued in expansion for the 55th month after one month of contraction in April 2020. The New Orders Index returned to expansion territory, registering 50.4 percent, 3.3 percentage points higher than the 47.1 percent recorded in October. The November reading of the Production Index (46.8 percent) is 0.6 percentage points higher than October’s figure of 46.2 percent.

Recent Economic Data – Blue Links bring you to data source

Chicago PMI – Released 11/29/2024 – Chicago PMI remained in contraction territory in November and fell to 40.2 from 41.6 points in October. The latest reading indicated that Chicago’s economic activity contracted for the 12th successive month in November.

US Light Vehicle Sales– Released 11/27/2024 – U.S. light vehicle sales were at a seasonally adjusted annual rate (SAAR) of 16.038 million units in October.

Personal Income – Released 11/27/2024 – Personal income increased $147.4 billion (0.6 percent at a monthly rate) in October. Disposable personal income (DPI)—personal income less personal current taxes—increased $144.1 billion (0.7 percent). Personal consumption expenditures (PCE) increased $72.3 billion (0.4 percent).

Second Estimate of 3rd Quarter 2024 GDP – Released 11/27/2024 – Real gross domestic product (GDP) increased at an annual rate of 2.8 percent in the third quarter of 2024, according to the “second” estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 3.0 percent. The GDP estimate released today is based on source data that are more complete than the “advance” estimate which also had GDP increase by 2.8 percent. The update primarily reflected upward revisions to private inventory investment and nonresidential fixed investment as well as downward revisions to exports and consumer spending. Imports, which are a subtraction in the calculation of GDP, were revised down. The increase in real GDP primarily reflected increases in consumer spending, exports, and federal government spending. Imports, which are a subtraction in the calculation of GDP, increased. Compared to the second quarter, the deceleration in real GDP in the third quarter primarily reflected a downturn in private inventory investment and a larger decrease in residential fixed investment. These movements were partly offset by accelerations in exports, consumer spending, and federal government spending. Imports accelerated.

Durable Goods – Released 11/27/2024 – New orders for manufactured durable goods in October, up following two months of decline, increased $0.7 billion or 0.2% to $286.6 billion, the U.S. Census Bureau announced today. This followed a 0.4% September decrease. Excluding transportation, new orders increased 0.1%. Excluding defense, new orders increased 0.4%. Transportation equipment, also up following two consecutive monthly decreases, led the increase, $0.4 billion or 0.5% to $97.1 billion.

Consumer Confidence Released 11/26/2024  Consumer Confidence increased from 109.6 to 111.7 in November. The Expectations Index which is based on consumers’ short-term outlook for income, business, and labor market condition, ticked up 0.4 points to 92.3, well above the threshold of 80 that usually signals a recession ahead. Consumer confidence continued to improve in November and reached the top of the range that has prevailed over the past two years. November’s increase was mainly driven by more positive consumer assessments of the present situation, particularly regarding the labor market. Compared to October, consumers were also substantially more optimistic about future job availability, which reached its highest level in almost three years. Meanwhile, consumers’ expectations about future business conditions were unchanged and they were slightly less positive about future income.

New Residential Sales – Released 11/26/2024 – Sales of new single‐family houses in October 2024 were at a seasonally adjusted annual rate of 610,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development.  This is 17.3 percent below the revised September rate of 738,000 and is 9.4 percent below the October 2023 estimate of 673,000. The median sales price of new houses sold in October 2024 was $437,300.  The average sales price was $545,800. 

Existing Home Sales – Released 11/21/2024 – Existing home sales in October increased 3.4% from September and increased 2.9% year over year. Existing home sales increased to 3.96 million in October seasonally adjusted. The median price of existing homes for sale increased to $407,200, up 4.0% from one year ago.

Housing Starts– Released 11/19/2024 – October housing starts came in at 1,311,000, 3.1% below the September estimate and is 4.0% below the October 2023 rate. Building permits were 0.6% below the September rate at $1,416,000 and is 7.7% below the October 2023 rate. 

Industrial Production and Capacity Utilization – Released 11/15/2024 – Industrial production decreased 0.3% in October after falling 0.5% in September. Manufacturing decreased 0.5%. Utilities output increased 0.7%. Mining increased 0.3%. Total industrial production in September was 0.6% below its year-earlier level. Capacity utilization decreased to 77.1% in October, a rate that is 2.6% below its long-run average.

Retail Sales– Released 11/15/2024 – Headline retail sales were up 0.4% in October and are up 2.8% above October 2023.

Producer Price Index – Released 11/14/2024  The Producer Price Index for final demand increased 0.2 percent in October, seasonally adjusted. Final demand increased 0.1 percent in September and 0.2 percent in August. On an unadjusted basis, the index for final demand moved up 2.4 percent for the 12 months ended in October.

Consumer Price Index – Released 11/13/2024  The Consumer Price Index for All Urban Consumers increased 0.2% in October on a seasonally adjusted basis, after increasing the same as in each of the last three months. Over the last 12 months, the all items index increased 2.6 percent before seasonal adjustment.

This week we get data on CPI and PPI.

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Data Sources: 

Conference Board Economic Indicators   Bureau of Economic Analysis (BEA)   Congressional Budget Office (CBO)     U.S. Bureau of Labor Statistics (BLS)    Federal Reserve Economic Data (FRED Charts)

CME Fed Watch   U.S. Treasury – Yields   U.S. Census Bureau    Institute for Supply Management (ISM)    Weekly DOL Employment Data    BLS Monthly Jobs Report    JOLTS      All capital in one visualization 2020

US Energy Admn (EIA)   BLS Consumer Price Index CPI      BLS Producer Price Index PPIAtlanta Fed GDPNOW    NY Fed Nowcast GDP     US Census Bureau Housing Starts   U.S. Energy Admn

Consumer Credit  USCB Retail Sales   Construction Spending      Federal Reserve Dot Plots 2017   NY Empire Index    Philadelphia Federal Reserve   P/E Ratio Data -Yardeni Research

Technical Analysis Info: Koyfin.com  StockCharts.com – Financial Charts    Exponential vs Simple Moving Average

Other links: 1973 Arab Oil Embargo    Hunt Brothers Silver    Asian Contagion   Long-Term Capital bailout