Remember when you thought your first job interview went too well? That’s basically what happened to the markets this week after the December jobs report came in stronger than your Monday morning double espresso.
The numbers: The economy added a whopping 256,000 jobs last month—crushing expectations of 155,000—while unemployment dipped to a cozy 4.1%. Great for workers, not so great for investors hoping the Fed would start slashing rates faster than a Black Friday sale.
Speaking of not great…stocks took their second L in as many weeks:
- S&P 500: 1.5% to 5,827.04
- Dow: 1.6%
- Nasdaq: 1.6% (tech giants like Nvidia and Apple probably wish they could ctrl+z this week)
Treasury yields said “to the moon!” with the 10-year hitting 4.78%—its highest level since your New Year’s resolution was still intact.
Meanwhile in crypto land…Bitcoin pulled a rollercoaster move, touching $103k before settling around $93.5k. Seems even digital gold gets jittery about interest rates.
Bottom line: The job market’s strength might be too much of a good thing for investors betting on rate cuts. As they say on Wall Street: Mo’ jobs, mo’ problems (for market bulls).
Looking Ahead: A Week That’ll Keep Markets on Their Toes
Got your economic calendar marked? Here’s what’s keeping Wall Street up at night this coming week:
The Main Event: Inflation’s Latest Episode Wednesday’s CPI report is dropping faster than Taylor Swift tickets, with economists expecting a 0.3% monthly bump and 2.9% annual increase. Core inflation (aka inflation minus your grocery and gas bills) is forecast to rise by a tamer 0.2%. The numbers could either calm markets down or send them into a “rate cuts are canceled” panic.
Corporate America Takes the Mic: Earnings season is about to kick off, and CEOs will have plenty to explain about how they’re handling those pesky rising costs. Think of it as a quarterly performance review, but with billions of dollars on the line.
Fed Watch: Playing the Waiting Game Remember when everyone thought rate cuts were coming faster than AI predictions? Yeah, about that… After last week’s job report superhero moment, the Fed’s January 28-29 meeting might be less exciting than watching paint dry. Markets are now betting the monetary policy party won’t start until deeper into 2024.
Bottom line: Between inflation data that could spook markets, earnings calls that could go either way, and a Fed that’s getting comfortable in its “higher for longer” chair, investors might want to keep their seatbelts fastened. But hey, at least it won’t be boring!