Market Data as of Week Ending: 12/6/2024 unless noted otherwise
Large-cap indices continued their ascent into record highs, while mid and small-cap stocks took a breather and ended the week lower. Growth stocks significantly outperformed value across all sizes. Only three of the 11 sectors in the S&P 500 posted gains, but their strong performance more than offset losses in the other eight sectors. Consumer discretionary was the best-performing sector, fueled by Tesla’s ongoing rally. Energy was the worst-performing sector last week as oil prices continued to drop. Foreign stocks bounced back from last week’s losses and ended the week higher. Developed foreign markets benefited from the anticipated acceleration of easing policies from the European Central Bank and strong returns from Japanese stocks. Emerging markets also rose, driven by expectations of increased stimulus in China.
Fixed-income performance for the week was positive as yields across the curve dropped. Long-duration bonds outperformed shorter-duration bonds. The 10-year Treasury and 2-year Treasury yields both dropped 0.05%, ending the week at 4.15% and 4.10%, respectively. The 2-10-year slope remained unchanged at 0.05%. Investment-grade corporate bond yields and high-yield bonds both contracted, ending the week at 4.99% and 7.28%, respectively.
Economic data for the week was primarily focused on the labor market. While there were no major surprises in the economic releases, investors were looking for clues about the pace of potential rate cuts. Nonfarm payroll employment rose by 227k in November, bouncing back from October’s noisy reading of 36k, which was affected by hurricanes and labor strikes. The household survey reported an increase in the unemployment rate to 4.2%, which is in line with expectations. The October JOLTS report showed that job openings increased marginally to 7.7M, a decrease of 941k year-over-year. Total separations remained unchanged at 5.3M, with the separations rate holding steady at 3.3% for the third consecutive month. ISM Manufacturing PMI increased to 48.4% in October but remains in contraction territory for the 8th consecutive month. ISM Services PMI, though still in growth territory, declined more than expected to 52.1%. The University of Michigan consumer index rose to 74 in December, the highest level since April. Respondents increased their year-ahead inflation expectations to 2.9% while lowering their five-year outlook to 3.1%.