Economy
For the final jobs report before the Fed's meeting on December 10, the ADP report showed a surprise loss of 32,000 jobs for the month of November. Larger businesses added jobs but smaller companies with less than 50 employees saw payroll declines of 120,000. Despite the negative report, weekly claims for unemployment insurance plummeted to the lowest reading since September 2022. A weakening labor market has become the Fed's top priority over the last year, even with inflation running above their target of 2%. Bond traders, as reflected in the CME Group's FedWatch tool, have priced in a high probability of a rate cut this week. The Bureau of Labor Statistics' monthly jobs report (the "official" report) was pushed back from December 5 to December 16 because of the government shutdown, so the Fed is going to have to make do with the data they have.
Markets
The S&P 500 continued to grind higher this week, rising 0.31% by Friday's close. Monday was the only negative day for the week, which means the index has risen 9 of the last 10 trading sessions. We're just 0.3% away from closing at a new all-time high as we've entered what is historically a good month for stocks. The event this week that's got a good chance to move markets will be Jerome Powell's press conference Wednesday afternoon. He'll likely shed some insights as to how the Fed is looking at data entering 2026, and the markets are looking for any clues as to what their rate setting policy will be. While markets have largely priced in a cut next week, beyond that it's murky. Expectations are for a cut, then pause for a bit as more data comes out on the state of the labor market.
What We're Reading
- Millions Are About to Choose the Wrong Medicare Plan- ScienceDaily
- What's a Safe Retirement Withdrawal Rate for 2026?- Morningstar
Have a great weekend.
Dogwood Wealth Management