The Major Indices Closed The Week With Modest Gains.
There was not a lot of conviction from either buyers or sellers due in part to a growing sense that the market is overbought on a short-term basis. For the S&P 500, Friday's close at 4,604 marked an 11.8% rise off its October 27 low (4,117) and set a new 52-week high for the index.
Alphabet was a winning standout from the space, gaining 2.5% on the week after jumping more than 5.0% during Thursday's session following its Gemini AI model reveal.
That more helped propel the communication services sector to a 1.4% gain this week. The consumer discretionary sector was another top performer, climbing 1.1%. Meanwhile, the energy sector saw the largest decline (-3.3%) as oil prices dropped 3.5% to $71.18/bbl. The materials (-1.7%) and consumer staples (-1.3%) sectors also registered noticeable declines.
Market participants were dealing with some crosscurrents this week. Renewed concerns about global growth emerged after Moody's downgraded China's credit outlook to Negative from Stable, which was tied in part to concerns about structurally weaker growth prospects, and the October JOLTS - Job Openings Report showed the lowest number of job openings (8.733 million) since March 2021.
Other economic data, however, fit with the soft-landing narrative for the economy. That was good news for earnings, but may be bad news for rate-cut expectations. The ISM Non-Manufacturing Index for November rose to 52.7% from 51.8%, the weekly jobless claims numbers remain consistent with a robust labor market, the November Employment Situation report was deemed solid overall, and the preliminary University of Michigan Index of Consumer Sentiment for December was stronger than expected.
The fed funds futures market is no longer pricing in a rate cut in March following this week's data, but it still sees a strong likelihood of a cut in May (78.5% on Friday), according to the CME FedWatch Tool.
Treasuries settled the week with losses, largely in response to the release of the jobs report on Friday. The 2-yr note yield climbed 18 basis points to 4.74% and the 10-yr note yield rose two basis points to 4.25%. This price action put some renewed pressure on the 2s10s spread, which tightened by 16 bps to -49 bps.
In other news, cryptocurrencies made big moves higher this week, leaving Bitcoin at $44,241.
Nasdaq Composite: +0.7% for the week / +37.6% YTD
S&P 500: +0.2% for the week / +19.9% YTD
Dow Jones Industrial Average: UNCH for the week / +9.4% YTD
S&P Midcap 400: +0.3% for the week / +8.3% YTD
Russell 2000: +1.0% for the week / +6.8% YTD