12/11/23 Weekly Market Commentary

12/11/23 Weekly Market Commentary

December 11, 2023

What happened last week…         

The stock market extended its winning streak to six straight weeks as the DJIA, S&P 500, and NASDAQ all landed in positive territory. According to FactSet, as of December 8, the S&P 500 is forecasted to have an earnings growth rate of 2.7% for Q4 2023, which would be the second straight quarter of year-over-year growth for the index.

 

U.S. oil prices have fallen to their lowest level since late June, resulting in gasoline prices reaching their lowest price since January. According to AAA, the national average price per gallon is $3.19. OPEC+ seeks to reverse the slide in price with voluntary production cuts of 2.2 million barrels per day.

 

AbbVie (ABBV) announced that it will acquire neuroscience drugmaker Cerevel Therapeutics (CERE) for about $8.7 billion. Cerevel has developed experimental treatments for schizophrenia and Alzheimer's disease psychosis. The move comes less than a week after the company said it will purchase cancer drug developer ImmunoGen (IMGN) for $10.1 billion. Both deals are expected to close in the middle of 2024.

 

The ADP employment change missed expectations (128,000) as it decreased to 103,000 from the downwardly revised 106,000 (from 113,000). The unemployment rate landed lower than expectations (3.9%) as it decreased to 3.7% from 3.9%. Nonfarm payrolls beat expectations (190,000) as it increased to 199,000 from 150,000. Average hourly earnings month-over-month were higher than expectations (0.3%) as it increased to 0.4% from 0.2%.

 

The non-manufacturing PMI for November beat expectations (52.0) as it increased to 52.7 from 51.8, making it the 11th straight month of an expansionary reading.

 

What's happening this week…

The following companies report earnings this week: ORCL, ADBE, COST.

 

On Tuesday, the inflation rate year-over-year for November is expected to decrease to 3.1% from 3.2%, which was the first reading in decline since June. The rate peaked last year at 9.1% in June.

 

On Wednesday, the Federal Open Market Committee (FOMC) meets for the final time this year. According to the CME FedWatch Tool, as of December 8, there is a 98.4% probability that interest rates will remain at 5.25% to 5.50%. The FOMC has left rates unchanged the previous two meetings.

Thanks for Reading!


- The Rockline Team