December 8, 2023

Markets:

Stock futures fell Friday as a strong jobs report caused worries inflation would remain too high for the Federal Reserve to start cutting interest rates in the new year as widely hoped for by investors.

The move in futures came as yields popped after November’s nonfarm payrolls report showed an unexpected drop in unemployment, with the yield on the 10-year Treasury last up by 13 basis points at 4.26%.

The jobless rate fell 3.7% in November, compared to a forecast of 3.9%. The economy added 199,000 jobs, slightly ahead of the 190,000 estimate from Dow Jones and the 150,000 added in October.

To be sure, the decline was muted as the data in the monthly jobs report could also support the notion that the Fed is guiding the U.S. economy toward a soft landing, a steady economic recovery amid falling inflation. Average hourly earnings, seen as a leading indicator of inflation, rose about as expected in November as the economy added more jobs than the prior month.

Earlier in the week, investors also got private payrolls data that showed employers added fewer positions than economists forecasted, and job openings data that showed a decline to the lowest level since March 2021.

Stocks have mostly struggled this week, with the Dow losing 0.4% and the S&P 500 falling 0.2% — putting both benchmarks on track to break their five-week win streak. The Nasdaq climbed back into positive territory for the week. It’s currently higher by 0.2%, and if it stays in the green, it could post a sixth straight winning week.

Portfolio:

We enter the last trading session of the week holding set-ups in CVNA, BYND, U, AI, and IONQ.  We expect a bit of seasaw type of activity today potentially.  After the jobs report we had a drop, but would not be surprised to see a strong reversal, especailly next week.  Selling on strong economic news is not the sceneior right now that will play out.  This just shows the Fed will be done, costs will gradually fall, hopefully we can get wages to begin to rise and have this move in the right direction. The pain trade continues to build and headfakes need to be expected.  Be ready today and stay patient.  Next week also looks to start a holiday cycle we've followed for the past 20 years or so.  Let's continue to pinpoint opportunity and continue to build on our monster returns.