Stocks on track to close out month of big gains as jobs data looms


Traders work the floor of the New York Stock Exchange.

NYSE

Next week the stock will be in one of its best months, sometimes a busy week of economic data and ongoing tensions between the spreading virus and positive news on vaccines and treatments.

Another highlight of the week is expected to be Tuesday’s testimony from Fed Chairman Jerome Powell and Treasury Secretary Steven Menuchin before the Senate Banking Committee. They will discuss the emergency measures taken to help the economy after the outbreak of the epidemic.

So far the Dow was around 13% for November, and if it keeps its profit at the close of Monday, it will chalk out its best month since January, 1987. % For a month. It has the best performance since April of 12.7%, which was the third best month for the S&P 500 since its genesis in 1957.

November was also a big month for market rotation, with investors favoring stocks that would benefit from the rebounding economy and showed little love for big technology and longtime favorites among internet names. Financials were up more than 17% in the last month, and the industry grew by about 15%, as investors said vaccines would help the economy return to normal next year.

Tech has not achieved a single point for the month so far and lags behind the broader market. But some strategists expect big tech and internet names, Stay’s domestic stock, to fare better in December.

Quincy Crosby, chief market strategist at Prudential Financial, said, “The demise of big technology has been announced over and over again, and we see that the market does not abandon them, but when there is really concern there is a migration to big technology. it happens.” “The post-pandemic question is whether big technology can co-exist with small and mid-cap.” The small caps were one of the biggest winners in November, with Russell 2000, up 20.6%.

“We did not see major sales at Nasdaq,” as investors pledged cyclically and in value, she said. The Nasdaq was up 11.9% for the month, slightly better than the S&P 500.

Experts have warned that after the Thanksgiving holiday, there may be an even bigger jump in virus cases, which may begin to appear in the coming week. More than 12.6 million cases have been reported in the US

Jobs report

There are some important economic reports in the coming week, the most important being the Friday employment report. There is also ISM manufacturing data on Tuesday.

“I think the data here matters because if you listen to the Fed, and if you read through the Fed’s minutes, they are in transition here. They are becoming more concerned about the increase in Kovid cases, Definitely. Lack of fiscal support, “said Gregory Faranello, head of US rates at Amerivi Securities.

Strategists say another important report would be weekly jobless claims, which saw an increase in the past two weeks. “Employment figures are clearly weakening,” Furanello said. If it continues, it will keep a lid on treasury yields, which drives up opposite prices.

Jefferies economist Tom Simmons expects Census Bureau workers to be fired in November, and he estimates the economy will cover just 340,000 jobs.

“It’s hard to imagine in a particularly strong report coming on Friday,” Simmons said.

Economists at Bank of America estimated only 150,000 payrolls in November, compared to 638,000 in October. The private sector is expected to add 300,000, but government layoffs are expected to have affected total pay in their forecasts.

Furanello said he expects the bond market to become a lot more active than usual due to the pending changes in the White House this December, along with Georgia’s runoff election on Jan. 5 that will decide whether Republicans hold their Senate majority. The market is also concerned about the lack of incentives from Washington.

“The theme in the market is definitely a dynamic on the ground right now with hope and optimism vs. Kovid,” Furanello said. “The real question is if we look at the virus the vaccine can hold a rally and we continue to see a shutdown. How does the market come to light?”

Crosby said he hoped the market would look for vaccine news. “I think the question is whether or not we look at the emergency authority given to Pfizer and then Modern has also looked at it,” she said. “I think it’s a catalyst for the market because that’s when you’ll start looking at the vaccines that are delivered.” The Food and Drug Administration’s Vaccine Advisory Committee has scheduled a meeting to discuss emergency authority for Pfizer on 10 December

Analysts expect investors to continue to gravitate to price and cyclicals, as they may have the greatest leverage compared to the already high-priced large technology. But the technology is still attractive.

“We still see the Nasdaq leading,” Crosby said. “Where we enjoyed the vaccine-related boom in the market is the fact that investors and traders are looking for big tech names to give them an increase in earnings and revenue.”

Week ahead of calendar

Monday

Chicago PMI at 9:45 p.m.

10:00 am hampering home sales

Tuesday

Monthly vehicle sales

Manufacturing PMI at 9:45 am

At 10:00 am ISM Manufacturing

10:00 am Construction Expense

12:00 PM at Atlantic Council presented by ECB President Christine Lagarde, former Fed Chair Janet Yellen

1:15 pm San Francisco Fed President Mary Daly

Wednesday

ADP employment at 8:15 p.m.

9:00 pm New York Fed President John Williams

10:00 am Philadelphia Fed President Patrick Harker

1:00 PM Williams of New York Fed

Beige Book at 2:00 pm

Thursday

8:30 AM Initial Employment Claims

Service PMI at 9:45 am

10:00 am ISM Non-Producers

Friday

8:05 am Williams of New York Fed

8:30 AM Employment Report

8:30 am international trade

9:00 pm Chicago Fed President Charles Evans

10:00 am factory orders



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