Author: Zac Martin, Investment Associate
Week Ending December 6th - Crosstown
Employment Update: ADP National Employment survey contracted by -32k. Out of the last six reports, four have been negative. However, according to a recent NFIB Survey this weakness in the job market may be a temporary soft patch. Over the last several months small business owners have increased their hiring plans over the next 3-6 months (see chart below). Regardless, this was the second to last report the Fed will receive about the labor market before their Rate Decision on Wednesday.
PMI & Sentiment Update: ISM PMIs largely remain on the multi-year trend, services remain in expansionary territory while manufacturing remains in contraction territory. This is anomalous – Manufacturing PMI has never been in contraction territory this long without a recession occurring.
Fed Update & Expectations: Final inflation report before the Fed’s meeting on Wednesday was the Personal Consumption Expenditures report for September. The rate of inflation remained relatively unchanged, growing 2.8% year over year. The largest contributors were housing and health care costs, these components have been the “stickiest” over the past couple of years. Despite inflation being above the Fed’s target rate, the market is anticipating a 25bps cut as the labor market remains weak.
The Week Ahead:
- JOLTS report (12/9)
- FOMC Meeting (12/10)
- ORCL & AVGO earnings (12/10 & 12/11)
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