All major stock averages closed higher for the week thanks to a Friday afternoon rally that pushed the Dow back into positive territory. Several key economic reports drove the action, including the ADP November Nonfarm Payrolls and Employment Reports and the October Personal Spending Report. Most important, perhaps, was Federal Reserve Chairman Jerome Powell’s comment to the Brookings Institute, where he indicated that the pace of interest rate hikes could slow as early as December – although he expects that the policy remains restrictive for a period of time; the Fed “will stay the course until the job is done,” he said. The comments came after a weaker-than-expected ADP payrolls report, but ahead of a stronger-than-expected nonfarm payrolls report. With these kinds of mixed signals, expect more market volatility as investors remain on the lookout for more definitive signs that the Fed is winning its war on inflation and can therefore definitely ease its hawkish stance. Under the hood, Communication Services led higher, followed by Consumer Discretionary and Health Care, while Energy led lower, followed by Financials, with the only two sectors closing lower for the week. Meanwhile, the US Dollar Index retreated to just below the 105 level. Gold rose to around $1,800 an ounce. WTI crude prices are hovering around the $80 a barrel level while the 10-year Treasury yield is back to around 3.5%. Looking back In the portfolio, we had quarterly results from Salesforce (CRM). There were three key economic reports on Wednesday. The November ADP jobs report showed private sector payrolls rose by 127,000, well below the estimate of 190,000. revised up to an annualized rate of increase of 2.9%, up from the 2.6% rate indicated in the “prior” estimate and above the 2.8% expected. October pending home sales fell 4.6% month over month and 37% from a year ago. On Thursday, we got three more key numbers. Initial jobless claims for the week ending November 26 were 225,000, down 16,000 from the previous week and below expectations of 235,000. The PCE core price index – the indicator for the Fed’s favorite inflation – posted a 5% annual increase in line with expectations. The ISM manufacturing report for November was 49%, below the estimate of 49.7% and the lowest value since May 2020. Although this was the 30th consecutive month of growth, it also showed a contraction in the manufacturing sector after 29 consecutive months of growth. Finally, on Friday, the all-important Nonfarm Payrolls report was released, showing an increase of 263,000 payrolls in November, above the 200,000 expected. In addition, hourly wages increased by 0.6% per month, doubling the estimate of 0.3%. On an annual basis, salaries increased by 5.1%, higher than the 4.6% expected by the Street. What lies ahead Earnings season is nearly over. Within the portfolio, we will hear Costco (COST) on Thursday after the closing bell. Here are some other earnings reports and economic numbers to watch in the week ahead: Monday, December 5 Before the bell: Science Applications International (SAIC) After the bell: GitLab (GTLB), Sumo Logic (SUMO) Factory 10:00 a.m. ET: ISM Services Tuesday, December 6 Before the bell: AutoZone (AZN), Signet Jewelers (SIG) After the bell: Casey’s General (CASY), Dave & Buster’s (PLAY), MongoDB (MDB), SentinelOne (S) , Smith & Wesson (SWBI), Stitch Fix (SFIX), Toll Brothers (TOL), AeroVironment (AVAV) Zuora (ZUO) Wednesday, December 7 Before the bell: Academy Sports (ASO), Brown-Forman (BF), Campbell Soup (CPB), Thor Industries (THO), Ollies Bargain (OLLI), United Natural Foods (UNFI) After the bell: GameStop (GME), Greif (GRF), Rent the Runway (RENT), C3. ai (AI) Thursday, December 8 Before the bell: Ciena Corporation (CIEN), Express (EXPR), GMS (GMS) After the bell: Broadcom (AVGO), Chewy (CHWY), DocuSign (DOCU), lululemon (LULU) 8 8:30 a.m. ET: Initial unemployment claims Frida y, Dec. 9 Before the bell: Li Auto (LI) 8:30 a.m. ET: Producer Price Index (See here for a full list of Jim Cramer’s Charitable Trust stocks.) As a CNBC Investing Club subscriber with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTMENT CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, AS WELL AS OUR DISCLAIMER. NO OBLIGATION OR FIDUCIARY DUTY EXISTS, OR IS CREATED BY YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTMENT CLUB. NO SPECIFIC RESULTS OR PROFITS ARE GUARANTEED.
US Federal Reserve Chairman Jerome Powell speaks at the Brookings Institution, November 30, 2022 in Washington, DC
Drew Anger | Getty
All major stock averages closed higher for the week thanks to a Friday afternoon rally that pushed the Dow back into positive territory. Several key economic reports drove the action, including the ADP November Nonfarm Payrolls and Employment Reports and the October Personal Spending Report. Most important, perhaps, was Federal Reserve Chairman Jerome Powell’s comment to the Brookings Institute, where he indicated that the pace of interest rate hikes could slow as early as December – although he expects that the policy remains restrictive for a period of time; the Fed “will stay the course until the job is done,” he said.
