S&P 500 (SPY) Report – 12/05/23
Good morning, traders!
The S&P 500 ($SPY) is trading below yesterday’s close. Let’s get into it…
US stock futures decline on Tuesday, marking a potential continuation of the previous day’s downturn. This shift in the market is largely due to investors’ anticipation of new job data, which is expected to influence the Federal Reserve’s decisions on interest rates. The tech sector, in particular, saw a notable decrease, with Nasdaq 100 futures falling by 0.5%. The S&P 500 and Dow Jones Industrial Average also saw declines, though slightly less.
Investor confidence, which had been bolstered by a strong rally in November, is now wavering due to uncertainties about the Federal Reserve’s future actions regarding rate hikes. Upcoming job market data, including the October job openings, ADP private payrolls, and the crucial monthly jobs report, are being closely monitored. These reports are expected to provide insights into the US economy’s trajectory and potentially influence the Fed’s policy direction.
Adding to the cautious market sentiment, Moody’s downgraded its outlook for China’s credit to negative, highlighting concerns over the country’s increasing debt and property market issues. This development contributed to a sell-off in Chinese stocks, affecting global market sentiments. However, not all sectors showed declines; the Russell 2000 index, representing small caps, posted a 1% gain, continuing its upward trend over the past month. This growth in small caps suggests some optimism among traders about the Federal Reserve potentially cutting interest rates next year.
Looking forward, experts like Jason Heller from Coastal Wealth advise caution, predicting that stocks may not see significant gains due to factors like high interest rates and a weakening consumer base. UBS analyst Mark Haefele echoes this sentiment, suggesting that after a strong November, stock gains in December and the following year are likely to be more modest. As investors recalibrate their expectations, all eyes are on the Federal Reserve’s next moves and the upcoming job data, which will play a crucial role in shaping market trends.
Tuesday Economic Events:
Redbook Sales 8:55am ET
PMI Composite Final 9:45am ET – High Volatility Expected
ISM Services Index 10:00am ET
JOLTS 10:00am ET – High Volatility Expected
API Crude Oil Report 4:30pm ET
Fed Speaker Scheduled:
No Fed Speakers Scheduled
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