Stock markets logged in their fifth straight week of gains, rallying into December after a stellar performance last month. All main stock indexes notched their 2023 high on Friday after Jerome Powell’s speech failed to dissipate market expectations of rate cuts next year.
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The Federal Reserve Chair said it is too early to determine with certainty that the central bank has achieved “a sufficiently restrictive stance” of its monetary policy and added that rate cut speculations are premature. However, he also acknowledged the inflation rate deceleration in recent months, which, in context of the weak manufacturing reports and declining PCE inflation data, was read by the optimistic investors as a view that policy rates have peaked. Bond yields fell, supporting stocks.
With no market-moving earnings releases scheduled for this week, investors will zoom in on the many important economic reports scheduled to be published in the next few days. The main emphasis will be on the labor market data, which will help investors judge the ongoing impact of the Fed’s previous rate increases.
Here are four economic events that could affect your portfolio this week. For a full listing of all upcoming economic events, check out the TipRanks Economic Calendar.
» October’s Factory Orders – Monday, 12/4 – This report, released by U.S. Census Bureau, measures total orders (including durable and non-durable goods) from manufacturers. Thus, this report provides an insight into the trends within the manufacturing sector. The report also serves as one of the leading indicators for the overall economy, as it reflects vendors’ outlook for the consumer demand for manufactured goods.
» November’s ISM Services PMI – Tuesday, 12/5 – This report, published by the Institute for Supply Management, shows business conditions in the U.S. services sector, the largest and most important GDP contributor. The ISM Services PMI is a forward-looking indicator, providing an important insight into the factors that influence GDP growth and inflation. When the business activity index rises, investors may assume that the stock markets will increase because of higher anticipated company earnings.
» November’s Nonfarm Payrolls and Unemployment Rate – Friday, 12/8 – The Nonfarm Payrolls and Unemployment reports, released by the U.S. Bureau of Labor Statistics, present the number of new jobs created during the previous month, and the percentage of people that were actively seeking employment in the previous month. These reports are considered two of the most important economic indicators, as policymakers follow the shift in the number of positions since it is strongly associated with the health of the economy as a whole. One of the mandates of the Federal Reserve is full employment, and it takes labor market changes into account when determining its policy decisions, which influence the capital markets.
» December’s Michigan Consumer Sentiment Index (preliminary) – Friday, 12/8 – This report, published by the University of Michigan, portrays the results of a monthly survey of consumer confidence levels in the United States. The level of confidence affects consumer spending, which contributes about 70% of the U.S. GDP.
