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Week in Review: Dec.4.2023 - Dec.8.2023

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December 11, 2023

Market Recap


The S&P 500 rose for the sixth straight week, the longest rally since November 2019, as markets parsed hotter-than-projected November jobs data and awaited this week's key Federal Reserve meeting and inflation reports. The benchmark equity index ended Friday's session at 4,604.37, up from the previous week's close of 4,594.63. Among sectors, communication services and consumer discretionary rose more than 1% each, with technology, industrials and health care also notching gains. Energy posted the steepest decline at 3.3%, while materials, consumer staples, real estate, utilities and financials also closed lower.

Total nonfarm payrolls rose by 199,000 last month, the Bureau of Labor Statistics reported Friday. The consensus was for a 185,000 gain in a survey compiled by Bloomberg. Markets are widely expecting the Federal Open Market Committee to hold its benchmark lending rate steady this week, according to the CME FedWatch Tool.

Last week, Fed Chair Jerome Powell said that it would be "premature" to "speculate" when interest-rate cuts may begin as the FOMC is ready to tighten policy further, if needed. The committee has increased interest rates by 525 basis points since March 2022 in a bid to combat inflation, with its last hike coming in July this year.

The official readings on consumer inflation and producer prices for November are scheduled to be released this week.

In communication services, Alphabet (GOOG, GOOGL) rose 2.5%, as its Google unit rolled out artificial intelligence model Gemini in some of its products, including its AI chatbot Bard.

In health care, the White House outlined new measures aimed at lowering prescription drug costs and preventing anti-competitive mergers in the industry. For the week, the sector got a boost from a 4.1% rise in AbbVie (ABBV), which agreed to acquire Cerevel Therapeutics (CERE) for $8.7 billion.

In consumer staples, an 11% gain in Walgreens Boots Alliance (WBA) helped counter an 8.1% slump in Brown-Forman (BF.A, BF.B). Walgreens announced expanded COVID-19 and flu testing and treatment options in the US. Brown-Forman cut its annual sales outlook following its fiscal Q2 miss.

In financials, Citigroup's (C) Jane Fraser joined the growing list of bank chief executives to warn about a potential economic recession. Wells Fargo Investment Institute separately said that the world's largest economy is likely to see a "moderate" slowdown in H1, leading to a cooling in inflation and potential monetary-policy easing, followed by an economic recovery in the latter part of the year.

On the economic front, this week all eyes will be on the official reading of CPI and PPI. This week's calendar also includes reports on retail sales and industrial production for November, as well as the New York Fed's Empire State manufacturing index for this month.

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