this week
This week saw mixed data, mostly supporting a rate cut by the Federal Reserve next Wednesday.
- Labor market data were weak For November. ADP shows 32,000 jobs in private sector LossWhile employment subindexes in manufacturing and services PMI remained Shrinkage For 10 and 6 months respectively.
- Core PCE inflation slowed It slowed to 2.8% in September from 2.9% for the first time since April, as soft core services inflation offset a 2¼-year high rise in core goods inflation.
- Activity data was softalso, with Real consumer spending and manufacturing output both flat on September.
Therefore, the market probability of a rate cut next week remains above 85%.
With a rate cut more likely, the Nasdaq-100® ended the week up +1% (blue line), but 10-year Treasury yields rose more than 10 basis points to 4.15% (black line), partly driven by Japan’s potential rate hike.
next week
Here are five shows I’m watching next week:
- Summary of Fed decision, press conference and economic projections on Wednesday
- Q3 Employment Cost Index (the Fed’s preferred wage metric) on Wednesday
- Job openings, hires, departures and layoffs blow on Tuesday in October
- Q3 productivity growth on Tuesday
- November NFIB Small Business Optimism Tuesday
