“If you’re saving, you’re succeeding.”
-Steve Burkholder
Here’s what you need to know this week:
- Markets hold flat for the month of December
- Investors await one more inflation report ahead of the final Federal Reserve meeting of the year
Holding Pattern
Stocks reached new all-time highs in the first week of December before retreating this week, leaving them roughly unchanged so far this month. Markets were encouraged by last week’s payrolls report from the Bureau of Labor Statistics, which showed the US economy gaining 227,000 jobs in the month of November. The report also showed unemployment slightly rising from 4.1% to 4.2%[1]. These numbers indicate that the economy is still running strong, and now investors are looking ahead to next week’s Federal Reserve meeting.
Inflation on Deck
Later this morning we will receive the Consumer Price Index (CPI) report for the month of November.Wall Street consensus is that the report will show monthly inflation at 0.3% and annualized inflation at 2.7%[2]. Last week’s blitz of economic reports has increased investor confidence in a 25 basis point (0.25%) rate cut next week: as of writing, the bond market is assigning an 88% chance of a cut next week, up from just 68% last week[3].
Investors are also feeling relieved at the prospect of more Fed stability moving forward. President-elect Trump spoke with Meet the Press on Sunday and said “I don’t see it” when asked if he planned on replacing Federal Reserve Chairman Jerome Powell[4]. As I often say in this blog, markets hate uncertainty, so having this particular question removed for the time being should bolster market prices. The Fed will meet to determine interest rate policy next Tuesday and Wednesday and will announce their decision on Wednesday at 1:00 PM CT. Next week’s blog will come on Thursday so that I can discuss the Fed’s decision and the initial market reaction.
What Else
- President-elect Trump met with French president Emmanuel Macron and Ukrainian President Volodymyr Zelenskiy during his trip to the reopening of the Notre Dame cathedral in Paris
- A man named Luigi Mangione has been arrested in connection with the murder of United Healthcare CEO Brian Thompson
- Syrian dictator Bashar al-Assad was forced out of the country by rebels advancing on the capital, ending the Assad regime’s fifty year reign in the country
- South Korean president Yoon Suk Yeol briefly declared martial law over the weekend; Korean lawmakers are currently considering impeachment for Yoon
- The College Football Playoff bracket has been set and the games begin on December 20th
- The NCAA will announce the winner of the Heisman trophy this Saturday
- The NBA in-season tournament officially tipped off last night
What We’re Reading
The Geminid meteor shower, a recurring meteor shower that comes around roughly every 17 months, will arrive this weekend and will peak between December 13th & 14th. Click below to learn about the origin of the Geminid and read tips for the best way to see it:
What’s Happening Downtown
The Myriad Gardens are hosting Myriad & Bright this Friday and Saturday. This event features a light and music show inside the Crystal Bridge Conservatory, photos with Santa, story time with Mrs. Claus and a market of local vendors. Click below to learn more:
Written by: Kane Ogle, CFP®
Steve Beck, Amber Eduvigen, CFP®, Kane Ogle, CFP®, Cale Olbert, CFP®, Brett Valentine, Brandon Ingerson, Jenni Hess, Anne Boone
Sources: [1] BLS [2] Yahoo! Finance [3] CME Group [4] Bloomberg