Stocks closed sharply higher during the shortened trading session on Friday, clocking their best post-Thanksgiving Friday session in over a decade. Friday’s rally propelled stocks to notable weekly gains, with the S&P 500 (SPX) and the Dow Jones Industrial Average (DJIA) reaching new records. The two indexes gained 1.41% and 2.37%, respectively. The tech benchmarks Nasdaq Composite (NDAQ) and Nasdaq-100 (NDX) lagged behind their peer indexes, though still notching gains of 1.3% and 0.9% for the week, respectively.
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All four major indexes capped their best month in a year, as investors found reassurance in Trump’s pick for his Treasury secretary position. The President-elect chose Scott Bessent, a seasoned hedge fund executive with deep knowledge of global financial systems and currency markets. Investors assumed that Bessent, with his expertise and measured approach, will prioritize economic and market stability. Mr. Bessent has also received a mark of approval from JPMorgan’s CEO Jamie Dimon, who said that he is “a fiscal hawk” and supported the nomination as “positive overall for the economy and the markets.”
The Treasury secretary pick took some heat off the tariff worries, which have weighed on investor sentiment, specifically in light of their effect on inflation. The Fed’s preferred inflation measure, Core PCE, came in at 2.8% annualized pace for October. Although in line with expectations, the figure remained stubbornly above the central bank’s 2% target.
Last week, investors also received confirmation of the economy’s continued robust health, as the revised Q3 GDP growth (annualized) was 2.8%, in line with economists’ projections. A strong economy and still-high inflation raised questions among investors as to whether to expect another rate cut this year. These doubts were supported by another batch of additional data, including a decline in weekly unemployment claims.
However, the Fed’s November Minutes showed the rate committee members were confident that inflation was heading toward their 2% annual target and expected to continue to lower interest rates gradually over time. This week’s release of jobs data may add some clarity to the extent that policymakers will need to support the labor market by relaxing their monetary policy.
Four Economic Events
Here are four economic events that could affect your portfolio this week. For a full listing of additional economic events, check out the TipRanks Economic Calendar.
» November’s ISM Manufacturing PMI – Monday, 12/02 – This report shows business conditions in the U.S. manufacturing sector and serves as a significant indicator of the overall economic conditions. PMIs are considered one of the most reliable leading indicators for assessing the state of the U.S. economy, helping analysts and economists anticipate changing economic trends.
» November’s ISM Services PMI – Wednesday, 12/04 – This report shows business conditions in the U.S. services sector, which contributes over 70% of the U.S. GDP. PMI indices are leading economic indicators used by economists and analysts to gain timely insights into changing economic conditions, as the direction and rate of change in the PMIs usually precede changes in the overall economy.
» November’s Nonfarm Payrolls and Unemployment Rate – Friday, 12/06 – The Nonfarm Payrolls and Unemployment reports present the number of new jobs created during the previous month, along with the percentage of people actively seeking employment in the previous month. These reports are two of the most important economic indicators, as policymakers follow the shift in the number of positions since it is strongly associated with the overall health of the economy. One of the Federal Reserve’s mandates is full employment, and it considers labor market changes when determining its policy decisions.
» December’s Michigan Consumer Sentiment Index and UoM 5-year Consumer Inflation Expectations (preliminary readings) – Friday, 12/06 – These reports portray the results of a monthly survey of consumer confidence levels and consumer views of long-term inflation in the United States. The level of confidence affects consumer spending, which contributes about 70% to the U.S. GDP. The inflation expectations index is used as a component of the Fed’s Index of Inflation Expectations calculations.
For more exclusive market insights and content from TipRanks Macro & Markets research analyst Yulia Vaiman, click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
