Last week, positive jobs and wage data ended the nine-week rally for US equities, with the S&P 500 declining by 1.5%. A factor in the lower 3.7% unemployment rate and the creation of 216K new jobs in November was increased hiring in the government sector, which may not continue. Wages grew by 4.1% compared to last year, supporting US households but raising concerns about inflation, as higher wages can lead to increased costs, especially in the labor-intensive service sector.
This week, the focus shifts to December’s inflation data, with the Consumer Price Index set for release on Thursday and the Producer Price Index on Friday. Low December inflation figures would increase the odds of interest rate cuts in 2024. Additionally, Friday marks the start of the earnings season with reports from JPMorgan Chase ($JPM), Delta Air Lines ($DAL), and UnitedHealth Group ($UNH). Lower input costs and robust consumer spending are expected to have bolstered Q4 earnings for many US companies. Strong corporate earnings in the fourth quarter could justify current equity valuations.
Tonight, college football fans will watch Michigan vs. Washington in the College Football National Championship game, which will be held at the NGR Stadium in Houston, TX. Michigan is favored to win by 4.5 points, according to FanDuel Sportsbook.
Thank you for reading,
Follow us on Facebook for these weekly updates at Unify Financial Advisors Facebook Page.