S&P 500 (SPY) Report – 12/07/23

Good morning, traders!

The S&P 500 ($SPY) is trading above yesterday’s close. Let’s get into it… 

U.S. stock futures show mixed performances today, as the labor market shows signs of normalization, suggesting that the Federal Reserve’s interest rate hikes aimed at controlling inflation are having their intended effect. As a result, there is increasing optimism about a stable economic condition, or a “soft landing,” which has led traders to anticipate a possible shift in the Fed’s policy towards lowering interest rates. However, there’s a sense of uncertainty in the market, heightened by hints from the Bank of Japan about a potential end to its negative interest-rate policy. This has influenced the U.S. 10-year Treasury yield, causing an increase.

Investors are also considering the possibility of a slowdown in the stock market’s growth following its strong performance in November. Traditionally, December is seen as a less eventful month for the markets. In this context, financial analysts are paying close attention to the latest weekly jobless claims data and the upcoming monthly U.S. jobs report. This report is particularly significant as it will provide insights into inflation and interest rate trends before the Federal Reserve’s final meeting of the year.

Lastly, the resilience of the job market is under scrutiny. Recent data, including a marginal increase in weekly jobless claims and a steady four-week average, suggests stability. The job market’s strength is a key factor in the Federal Reserve’s interest rate strategy. The upcoming November payroll report, expected to reveal a moderate increase in new jobs and slowing wage growth, will be a critical indicator of the job market’s health and its impact on future economic policies.

Thursday Economic Events:
Challenger Job Cut 7:30am ET
Jobless Claims 8:30am ET – High Volatility Expected
Wholesale Inventories 10:00am ET
EIA Natural Gas Report 10:30am ET
Consumer Credit 3:00pm ET

Fed Speaker Scheduled:
No Fed Speakers Scheduled

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