Saudi Arabia and Russia this week sought to convince markets that OPEC and its allies will come through with the promised 2.2 million bpd in cuts and are prepared to extend or even deepen them if necessary. Traders have been skeptical OPEC will deliver on first quarter production cuts, but a Reuters survey earlier this week found that group's output did decline in November for the first time in four months. Tamas Varga at PVM Oil Associates described Friday's rally as a "textbook pre-weekend short-covering." Varga also pointed to mortar fire at the U.S. crude closed below $70 for the first time since late June. Oil is still down about 4% for the week after Wednesday's selloff, when U.S. colliding with weakening demand in China. Traders have been bearish with record production in the U.S. Phil Flynn, an analyst with Price Futures Group, described Friday's rally as a "dead cat bounce" with prices trying to find support after a long losing streak. The Brent contract for February rose $1.82, or 2.46%, to $75.87 a barrel. The West Texas Intermediate contract for January gained $1.86, or 2.68%, to trade at $71.22 a barrel. crude oil rallied on Friday but is on pace for seven straight weeks of losses for the first time in five years. She believes that the Magnificent 7 group of mega-cap tech will not perform as well next year as it did against the broader market this year. Malik noted that broader market valuations are at a premium given the nearly 20% run in the S&P this year, making earnings all the more important next year, when companies will need to hold onto pricing power in a moderating inflation environment. "But there is one wrinkle, and that's average hourly earnings at 0.4% is inflationary, and I think this is what's going to set up a complicated backdrop for the markets in 2024." "Santa visited the markets early this year for three reasons and that's inflation which is moderating, the Fed signaling a pause and economic growth which is cooling, but not too cold, and today's jobs data supports that," Malik told CNBC's "Squawk Box" earlier Friday. With a hotter-than-expected employment report and sky-high tech valuations, markets are looking at volatility in the early part of next year, said Saira Malik, chief investment officer of asset management firm Nuveen. Shares of Boeing, FedEx, and Costco hit new highs for the year on Friday as investors bet the economy would skirt a recession.Ĭorrection: A previous version misstated the S&P 500's week-to-date performance. These data points all help support the thesis that the Fed is likely done with its rate hiking cycle, said Mona Mahajan, Edward Jones senior investment strategist. Meanwhile, a closely watched University of Michigan survey showed inflation expectations drop and consumer sentiment jump in December to it highest level since July. 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. economy toward a soft landing - a steady economic recovery amid falling inflation. On the other hand, the monthly jobs report could also support the notion that the Fed is guiding the U.S. Some traders expect the Fed to start cutting rates as early as next spring, with its latest policy meeting set for Wednesday. The data first raised concerns that the economy was running too hot for inflation to cool enough for the Fed to start retreating from its high-rates policy. The economy added 199,000 jobs, slightly ahead of the 190,000 estimate from Dow Jones and well ahead of the 150,000 jobs added in October. The jobless rate fell to 3.7% in November from 3.9% the prior month. November's nonfarm payrolls report showed an unexpected drop in the unemployment rate. "As long as the soft landing outcome stays intact, the bias for stocks and risk assets remains positive," he said, noting that inflation coming down, as well as better labor supply-and-demand balance without a major uptick in unemployment are all positives for sentiment. The jobs report continues to portray an economy that "isn't on the brink of recession," while the combination of falling inflation expectations and a pick up in consumer sentiment support a soft landing outcome, said Michael Arone, chief investment strategist at State Street Global Advisors. Both indexes wrapped six winning weeks, their longest run since 2019. The broad market index jumped 0.2% for the period, and the Dow finished marginally higher. Personal Loans for 670 Credit Score or LowerĪll the major averages finished the week with gains. Personal Loans for 580 Credit Score or Lower Best Debt Consolidation Loans for Bad Credit
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