The final trading month of 2024 kicks off in the coming week, promising a final push to the finish line that will consign this year’s monster rally to the history books. The jobs report is also ready. The stock market is at or near all-time highs, and as far as investors are concerned, there seems to be no reason why it can’t continue higher — at least in the short term. The market may be pricey and sentiment frothy, but optimistic investors point to a strong macroeconomic backdrop and optimistic earnings growth forecasts to justify prices. This setup also benefits stocks from a seasonal perspective. Sam Stovall, chief investment strategist at CFRA Research, said December was the strongest month in history for the S&P 500 Index and volatility is expected to be the lowest in history. He pointed out that looking at data going back to 1945, the S&P 500 rose an average of 1.6% that month, rising more than three-quarters of the time. “As Santa Claus says, you can say, ‘On the Dasher, in December,'” Stovall said. “Because typically, December keeps moving forward.” With the S&P 500 already up 26% this year, a typical December gain could put 2024 among the best years ever. According to FactSet, the S&P 500 has risen more than 27% in only six of the past 50 years. But investors will have to contend with a slew of economic data next month, as well as uncertainty about the incoming administration’s policies. “While you can’t really time the market with this kind of valuation, I think you say to yourself, do I really want to support trucks right now?” Stovall said. “We’ll probably need at least a correction in time, which means the market will be stagnant until earnings and sales improve, or prices correct and prices fall to more normal valuations.” The Dow Jones Industrial Average topped 44,000 for the first time this month, while The S&P 500 index exceeded 6,000 points for the first time. Both are within 1% of their all-time highs, while the Nasdaq is down 1.6%. On Friday, all three major stock indexes ended a strong month of gains, with each gaining more than 5% in November. November Employment Report The November employment report will be released next Friday. It will be the last important look at the labor market before the Federal Reserve meets on December 17-18, which means it is important for investors to plan for next month. The path of interest rates is very important and beyond. Investors hope an upbeat report showing solid labor market growth despite some signs of cooling will put the Fed on track to continue its easing path. The November report is expected to show the U.S. economy added 177,500 jobs this month, a sharp jump from the 12,000 jobs reported in October, according to FactSet consensus estimates, with markets largely buoyed by the weather anomalies in the data. Dismiss this number as “noise”. The unemployment rate is expected to rise to 4.2% from 4.1% previously, according to FactSet consensus estimates. This could boost confidence in a rate cut in December. Markets have been reducing expectations for a rate cut at next month’s meeting in recent days, but this week’s inflation report and GDP data have revived hopes that the central bank will be able to cut rates at this meeting. According to the CME FedWatch tool, the market currently expects about a 67% chance of a 25 basis point rate cut at the December meeting. Elsewhere next week, enterprise software giant Salesforce and discounters Dollar General and Dollar Tree are also due to release minor earnings reports. One week ahead calendar all times are Eastern Time. Monday, December 2 9:45 AM Final S&P PMI Manufacturing (November) 10 AM Construction Spending (October) 10 AM ISM Manufacturing (November) Tuesday, December 3 10 AM JOLTS Positions Vacancies (October) Earnings: Salesforce Wednesday, Dec. 4 8:15 a.m. ADP Employment Survey (November) 9:45 a.m. Final PMI Composite Index (November) 9:45 a.m. Final S&P Services PMI (November) November) 10 a.m. Durable Orders (October) 10 a.m. Factory Orders (October) 10 a.m. ISM Services PMI (November) 2 p.m. Fed Beige Book Earnings: Campbell Soup, Hormel Foods, Dollar Tree December 8:30 a.m. on the 5th: Continuing jobless claims (11/23) 8:30 a.m. Initial jobless claims (11/30) 8:30 a.m. Trade balance (October) Profit: Ulta Beauty, Hewlett Packard Enterprise, Dollar General , Kroger Friday, Dec. 6 8:30 a.m. November jobs report 10 a.m. Preliminary report on Michigan sentiment (December) 3 p.m. Consumer Credit (October)
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