S&P 500 makes it six

Despite an economic calendar that was packed with potentially market-moving data, the US stock market spent most of last week stuck within the confines of a two-week trading range. But a solid late-week push turned a ho-hum week into something a bit more interesting.

Although the S&P 500 (SPX) didn’t definitively break out of its consolidation, it still closed Friday at a year-to-date high for the second time in as many weeks, and extended its winning streak to six:

The headline: Quiet start to December as markets absorb jobs data.

The fine print: Most of last week was about soft economic data, especially on the labor front—factory orders were low, job openings were down, job cuts were up, productivity was up, and labor costs were down. Friday’s stronger-than-expected monthly jobs report broke that trend, but the market’s net reaction could be described as, “Let’s see what the Fed says after next week’s inflation numbers.” Morgan Stanley & Co. strategists recently shared some thoughts on whether the market is using the correct playbook in terms of its outlook on inflation and the economic cycle.¹

The number: 6. The last time the SPX closed higher six weeks in a row was in November 2019.

The move: 10-year T-note yield fell to nearly 4.1% last Wednesday and Thursday—lower than it’s been since early September—before rebounding back above 4.2% on Friday.

The scorecard: The small-cap Russell 2000 (RUT) posted the biggest gain for the second week in a row:

Sector returns: The strongest S&P 500 sectors last week were communication services (+1.4%), consumer discretionary (+1.1%), and information technology (+0.7%). The weakest sectors were energy (-3.3%), materials (-1.7%), and consumer staples (-1.2%).

Stock movers: Cerevel Therapeutics (CERE) +22% to $31.80 and Consensus Cloud Solutions (CCSI) +22% to $23.40, both on Monday, Arvinas (ARVN) +31% to $30.30 on Wednesday. On the downside, Gyre Therapeutics (GYRE) -31% to $16.06 on Monday, Sprinklr (CXM) -33% to $11.11 on Thursday.

Futures: Last Wednesday, January WTI crude oil (CLF4) traded below $70 for the first time since June. The market pared its losses on Friday but still ended the week nearly $3 lower at $71.23. Gold hit a new all-time intraday high last Monday, but quickly retreated: After spiking to $2,152.30, February gold (GCG4) closed down for the day and eventually ended the week more than $65 lower at $2,014.50. Week’s biggest gains: December Micro bitcoin (MBTZ3) +14.5%, December Micro ether (ETHZ3) +12.8%. Week’s biggest losses: March silver (SIH4) -10%. January natural gas (NGF4) -8.3%.

It’s all about inflation and the Fed this week:

●Monday: NY Fed Consumer Inflation Expectations
●Tuesday: Consumer Price Index (CPI)
●Wednesday: Producer Price Index (PPI), Fed interest rate decision
●Thursday: Retail Sales, Import Price Index, Business Inventories
●Friday: Empire State Manufacturing Index, Industrial Production, Capacity Utilization, S&P Global U.S. Composite PMI (flash)

Earnings this week include:

●Monday: Casey’s General Stores (CASY), Oracle (ORCL)
●Tuesday: Johnson Controls (JCI)
●Wednesday: Winnebago (WGO), Adobe (ADBE), Lennar (LEN)
●Thursday: Costco (COST), Scholastic (SCHL)
●Friday: Darden Restaurants (DRI)

Check the Active Trader Commentary each morning for an updated list of earnings announcements, IPOs, economic reports, and other market events.

The SPX’s higher close last week bucked its historical tendency to lose ground after five-straight up weeks, as described in “Streaks and setbacks.” After its other six-week streaks since 1957, the SPX closed higher the next week 62% of the time (28 out of 45 instances), with a median return of 0.3%.²

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¹ MorganStanley.com. Are Markets Following the Right Playbook? 12/4/23.
² Reflects S&P 500 (SPX) weekly price data, 1/2/57–12/8/23. Supporting document available upon request.