US Non-Farm Payrolls and December Trading: What to Expect in the Stock Market
The U.S. Bureau of Labor Statistics is gearing up to release the November employment report this Friday, and investors are eagerly awaiting this crucial data to gauge the Federal Reserve’s potential interest rate decisions. As we head into December, U.S. stocks are riding high near historical peaks, with both the S&P 500 and Dow Jones Industrial Average hitting new records in November. The market is anticipating around 200,000 new jobs to be added in November, potentially leading to a drop in the unemployment rate. On the corporate front, all eyes will be on Salesforce, Okta, and Lululemon as they gear up to report their earnings next week.
According to Zhitong Finance APP, U.S. stocks are looking to finish off 2024 on a strong note, with performances matching historical highs. In the past week’s shortened trading session, the Dow Jones Industrial Average surged over 2%, while both the Nasdaq Composite Index and S&P 500 Index saw gains of over 1%. Notably, both the S&P 500 Index and Dow Jones Index ended November on all-time highs.
Looking ahead, the U.S. Bureau of Labor Statistics will roll out a series of key labor market data next week, including the highly anticipated November employment report due Friday. Additionally, we can expect updates on job vacancies, wage growth in the private sector, and data on service and manufacturing activities throughout the week. All of this valuable economic data will play a crucial role in shaping the Federal Reserve’s upcoming interest rate decisions, slated to be announced on December 18.
Turning to corporate earnings, Salesforce (CRM.US), Okta (OKTA.US), and Lululemon (LULU.US) are the focal points of next week’s earnings lineup. The employment data is going to be a significant factor in shaping market expectations moving forward, particularly in light of the evolving interest rate cut predictions from the Federal Reserve. The upcoming November employment report is expected to counter the lackluster October report, which was impacted by hurricanes and worker strikes.
Economists are projecting that the U.S. labor market added around 200,000 jobs in November, a substantial improvement from the 12,000 reported in October. Simultaneously, the unemployment rate is anticipated to increase slightly from 4.1% to 4.2%. The narrative surrounding the labor market conditions will be further clarified by the November employment report, providing insights into the trend of the weakening employment landscape.
As we gear up for a new year, Wall Street strategists are looking optimistically towards 2025, with expectations suggesting that the S&P 500 Index could target between 6,400 and 7,000 by year-end. There is a prevailing sentiment that the stock market’s momentum will continue to expand, shifting its focus away from the tech sector’s “seven giants” towards the 493 other stocks within the index. The debate is ongoing on whether large tech companies will maintain their dominance in earnings growth, with conflicting opinions on the potential impact on the S&P 500 index.
Historical trends in December often point towards a strong finish to the year, with more record highs expected before the curtain falls on 2024. Analysts are drawing parallels to historical data, suggesting that the current bullish market is likely to sustain its momentum until the year’s end.
