In the past five trading sessions, the S&P 500 is down more than 1.5% while the Nasdaq Composite is down nearly 2%. Meanwhile, the Dow Jones Industrial Average fell about 1.5%.
Next week, a crucial series of labor market data is set to greet investors, with the December jobs report released Friday morning by the Bureau of Labor Statistics serving as the most important release of the week. Updates on employment opportunities and private wage growth are also scheduled, as well as readings on activity in service sectors.
Next week will provide a final glimpse into the labor market ahead of the Fed’s next meeting on January 30-31.
In corporate news, investors will be watching major announcements from technology companies like Nvidia (NVDA) during the Consumer Electronics Show. At the same time delta (D) and the constellation of brands )STZ) It is expected to announce quarterly results.
In his final press conference of the year on December 18, Fed Chairman Jerome Powell described the overall labor market as “good,” citing “downside risks.” Which appeared in the summer of 2024 As the unemployment rate rises, “it appears to have diminished.”
“The labor market is now more flexible than it was before the pandemic, and it is clearly still slowing more, so far, in a gradual and orderly way,” Powell said. “We do not believe we need further cooling in the labor market to bring inflation down to 2%.”
Economists expect incoming data to show a further gradual cooling. The December jobs report is expected to show that the US labor market added 153,000 jobs in the month, down from 227,000 jobs in November. Meanwhile, the unemployment rate is expected to remain steady at 4.2%.
“The labor market is on solid footing, but employment growth has slowed and overall labor market conditions cool in 2024,” Sam Coffin, a US economist at Morgan Stanley, wrote in a note to clients. “The good news is that the job market is not suddenly declining as it appeared last summer.”
As of Friday afternoon, markets were calculating just an 11% chance the Fed would cut interest rates at its January meeting. According to CME FedWatch.
The CES technology conference kicks off Monday with a keynote from Nvidia CEO Jensen Huang. An analyst question-and-answer session is also scheduled for Tuesday.
Nvidia stock has fallen more than 1% since reporting earnings after the bell on Nov. 20 amid concerns about delays in shipments of its new Blackwell chip. Nvidia shares still end 2024 up more than 150%.
Bank of America’s Vivek Arya told Brian Suozzi Opening Show Podcast On Thursday, broader market forces and company-specific issues led to the sell-off in Nvidia stock late last year. “What we saw in the market was a rotation of money from semiconductors to software,” Arya said, noting that the latter was less exposed to US trade restrictions on goods to and from China.
He added that for Nvidia, “the last two quarters haven’t been really clean, because they’re going through the growing pains from one generation of products that was Hopper to the new generation of products.”
The best seven-day stretch in history this year for the S&P 500 came and went without any gains. Since 1950, the S&P 500 rose 1.3% during the seven trading days beginning December 24 amid so-called Santa Claus walk.
But this year, the index fell by about 0.5%. Adam Turnquist, chief technical strategist at LPL Financial, wrote in a note to clients that when the S&P 500 achieves a negative return over this time period, it typically indicates a weaker year for stocks.
However, As we noted last weekLast year didn’t see a rise in Santa Claus either, and the S&P 500 could still rise about 24% in 2025.
“I don’t know how far the market goes from here,” Callie Cox, chief market strategist at Ritholtz Wealth Management, told Yahoo Finance. “I certainly don’t give much importance to seasonal patterns. Just because the market goes down during Santa Claus’s run doesn’t mean we’re doomed.”
One major catalyst could come with next week’s jobs report. With the recent rise in the 10-year Treasury yield (^ TNX) Roughly 4.6% helped contribute to bad sentiment around stocks, and Michael Kantrowitz, chief markets strategist at Piper Sandler, believes relief may be on the way.
“We think we need to see softer hiring until interest rates start to fall,” Kantrowitz said in a video to clients on Friday.
Whether the weak data comes next week or later in the first quarter, Kantrowitz believes this narrative shift from the rising rate environment could help “spurred stocks back.”
Monday
Economic data: S&P Global US Manufacturing PMI, final December (58.3 expected, previous 58.5); US S&P Global Composite PMI, final December (previously 56.6); Factory Orders, November (-0.3% expected, +0.2% previously); Durable Goods Orders, Final November (-0.3% expected, -1.1% previous)
Earnings: There are no notable earnings releases.
Tuesday
Economic data: Job openings, November (7.7 million expected, 7.74 million previously); ISM Services Index, December (53.1 expected, 52.1 previous)
Economic data: MBA Mortgage Applications, Week Ending January 3; ADP Special Payrolls, December (+130,000 expected, +146,000 previously); December FOMC meeting minutes
Earnings: albertson (ACI), Helen of Troy (all), Jefferies (Jeff)
Thursday
Economic data: Challenger Job Cuts, YoY, December (+26.8% previously); Initial jobless claims, week ending January 4 (previously 211,000)
