Weekly Economic Update: December 8th, 2022

Presented by Nicholas Wealth Management

December 8th, 2022

 

This Week on Wall Street

Stocks are looking to rebound from a lower start to the week. Volatility has increased this week, as the market digests additional economic data such as jobless claims, producer price index, and consumer sentiment. All eyes are on the Federal Reserve meeting next week when the next round of interest rate adjustments will be announced.

 

Last Week on Wall Street

Stocks ended higher last week as investors navigated the crosscurrents of a potential easing in future rate hikes and continued strength in the labor market.

The Dow Jones Industrial Average edged 0.24% higher, while the Standard & Poor’s 500 gained 1.13%. The Nasdaq Composite Index improved by 2.09% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, rose 1.68%.1,2,3

 

A Choppy Week

The week started lower on concerns about protests in China over its zero-Covid policy and comments by two Fed presidents that the Fed may continue its aggressive rate hike policy. Stocks then surged on Wednesday following remarks by Fed Chair Powell, confirming the central bank’s intention to slow the pace of interest rate increases, which may begin as early as this month.

Stocks buckled in early trading on Friday’s monthly employment report, which showed a higher-than-expected increase in new job growth and an above-expectations jump in wage growth. But stocks cut their losses by the end of the session to lock in a positive week.

 

Labor May be Key

In a presentation to the Brookings Institution, Powell said that it might be time to begin moderating the pace of rate hikes. He cited several areas of progress in the inflation fight, including a deceleration in interest rate-sensitive parts of the economy, such as housing and supply chain improvement. He also noted the price declines seen in goods and rents. 4

But Powell suggested the labor market would need to cool down before the Fed could feel confident about making sustainable progress toward its two percent inflation target. November’s employment report showed robust job and wage growth, which indicated any cooling remained in the future.5

 

The Week Ahead: Key Economic Data

Monday: Purchasing Managers’ Index (PMI) Composite. Factory Orders. Institute for Supply Management (ISM) Services Index.

Thursday: Jobless Claims. Purchasing Managers’ Index (PMI) Manufacturing.

Friday: Producer Price Index (PPI). Consumer Sentiment.

Source: Econoday, December 2, 2022

The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.

 

Tip of the Week

You can’t control what happens with interest rates or stocks in the future; you can control the amount you save for retirement. Boosting your personal savings ratio may bring you closer to your retirement savings objective.

 

CITATIONS:

  1. The Wall Street Journal, December 2, 2022
  2. The Wall Street Journal, December 2, 2022
  3. The Wall Street Journal, December 2, 2022
  4. The Wall Street Journal, November 30, 2022
  5. The Wall Street Journal, November 30, 2022

Please consult your financial professional for additional information.

This content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG is not affiliated with the named representative, financial professional, Registered Investment Advisor, Broker-Dealer, nor state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and they should not be considered a solicitation for the purchase or sale of any security.

Copyright 2020 FMG Suite.

Madison Luck

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