November 30, 2022

Markets:

S&P 500 futures rose Wednesday after a labor report signaled the job market could be cooling, raising hopes the Federal Reserve would slow its aggressive rate-hiking campaign.

Gains were muted as Wall Street awaits an afternoon speech from Federal Reserve Chair Jerome Powell.

Payroll processing firm ADP said Wednesday that private companies added just 127,000 positions for the month, well below the 190,000 consensus estimate from economists polled by Dow Jones. Treasury yields extended their decline and stock futures gained after the report. The official jobs report from the government is due Friday.

Powell will give a speech at the Brookings Institution this afternoon that may give further insight into the central bank’s thinking on future interest rate increases. The Fed is slated to meet later this month and is largely expected to deliver a smaller 0.5 percentage point rate hike after four consecutive 0.75 percentage point increases to tame high inflation. Any signal of a pivot on future rate hikes would likely send markets higher.

Stocks have been weighed down by China’s zero-Covid policy and have failed to fully recover from losses even as the country announced steps toward reopening, such as an uptick in vaccination rates for the elderly.

Stock futures saw a slight boost after new data from processing firm ADP showed private hiring sharply fell in November.

Companies added just 127,000 positions for the month, a notable drop from the 239,000 the firm reported for October and the smallest gain since January. That came in below the Dow Jones estimate of 190,000 for the month.

Portfolio:

We enter the new trading session holding positions in CWH, M, and AR.  Traders will be focused on Fed Chair Powell speech today and looking for clues and potential insight on the next rate hike.  One thing to keep in mind to help you with your trading plan over the next few weeks and even month, FED blackout period window starts on 12/3 and lasts through 12/15.  Typically, a bullish period.  Expect further swings today and light volume in the markets to continue as we await Powell and also PCE numbers tomorrow.  We will need receive CPI until 12/13 and with the Feb black out window beginning, the least expected move for this market (higher) could be in the works.  Be on alert today and ready.