Wall Street kicks off December with eyes on Federal Reserve Chair Jerome Powell, who is set to speak at a Stanford panel on Monday in his last public remarks before the Fed enters its self-imposed blackout ahead of the central bank’s final interest rate decision of the year.
Economic data will also take center stage, with updates on private employment, manufacturing, and the much-delayed August Job Openings and Labor Turnover Survey (JOLTS) drawing investor attention.
“Strong weekly performance transformed stock market performance in November,” said Kathleen Brooks, research director at XTB. “However, risk plummets as we start December.”
Bitcoin is down more than 5% and back below $90,000, adding pressure to risk sentiment across US and European futures.
Brooks said the sharp November drop in volatility, combined with Bitcoin’s slump, “may have unnerved some investors who remain concerned about an uncertain outlook into year-end.”
Despite Monday’s risk-off sentiment, there’s little demand for traditional safe havens. Gold is down $2, while the yen has gained only 0.3% against the dollar. Analysts caution the move may be short-lived: an 80% chance of a December Fed rate cut could cushion markets if economic data doesn’t surprise to the upside.
November’s rally was strong, with the S&P 500 rising 4.75% and the Nasdaq over 5%, buoyed by liquidity, momentum, and growth. Intel led the tech rebound with a 10% gain Friday, and Google’s market cap surged past $3.8 trillion, highlighting a reshuffle at the top of the AI trade. “This revitalizes the AI trade,” Brooks noted, though she warned Monday could see some profit-taking.
Retail data will be closely watched this week. Early indications show U.S. Black Friday sales rose 4.1% from a year ago, suggesting the consumer remains resilient despite rising costs. The delayed September Core PCE reading, the Fed’s preferred inflation gauge, is expected at 2.8%, providing further clarity ahead of the December 10 FOMC meeting.
Deutsche Bank analysts highlighted the significance of ADP employment data on Wednesday, forecasting a modest rise of 50,000 jobs. “This will be the most up-to-date labor market data point that Fed officials will have in hand at their upcoming meeting,” the bank said, noting it could influence expectations for future rate cuts.
UBS economists added that manufacturing and services indexes are expected to show modest improvement, but consumer sentiment remains muted. They noted, however, that recent data suggests Americans continue to spend and invest at healthy levels.
With December shaping up as a key month for both macroeconomic data and corporate earnings, traders will be balancing optimism from strong year-end momentum with caution over inflation and Fed policy. As Brooks summed up, “After a strong end to November, hopes were high for a bullish end to the year—but the narrative has abruptly shifted on Monday.”
Retail giants are slated to report earnings this week, including Kroger Co (NYSE:KR, XETRA:KOG), Dollar General Corp (NYSE:DG), and Dollar Tree, Inc. (NASDAQ:DLTR). Dow component Salesforce Inc (NYSE:CRM, XETRA:FOO) and chipmaker Marvell Technology Group Ltd. (NASDAQ:MRVL) are also on the docket.