Last week’s holiday-shortened trading finished with equities higher and Treasury yields continuing to move lower.1 The 10-year Treasury finished at 4.17%, which was 23 basis points (bps) lower on the week.2 Most of the move in Treasuries was due to lower real growth expectations being priced in as the 10-year real rate moved approximately 15 bps lower.3 While markets had a solid week in performance, the month of November was strong with equities leading the way. The S&P 500 Index returned +5.87%, investment-grade corporate bonds +1.34%, U.S. corporate high yield +1.15% and Treasuries +0.30%.4
This week is important as it will likely decide the fate of the next Federal Reserve (Fed) meeting on December 18.5 We will be closely watching the Institute for Supply Management’s (ISM) Manufacturing and Prices Paid today, the Job Openings and Labor Turnover Survey (JOLTS) on Tuesday, mortgage applications and ADP employment change along with ISM Services Prices Paid and durable goods orders on Wednesday.6 Thursday brings the initial jobless claims data, while Friday is the big day with the release of the November nonfarm payrolls, unemployment and average hourly earnings numbers followed by the University of Michigan inflation expectations.7 By the end of this week, we should have better visibility into the Fed’s next move and how strongly 2024 will conclude.
Sources:
1-4, 6-7Bloomberg
5Board of Governors of the Federal Reserve System – 2024 FOMC Meetings
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