Investors are trying to read the tea leaves in a choppy U.S. stock market to gauge whether its recent run higher can continue after Federal Reserve Chair Jerome Powell unleashed bullish sentiment at the end of November by indicating its aggressive interest rate hikes could slow.
The U.S. added a robust 263,000 new jobs in November, exceeding the forecast of 200,000 from economists polled by The Wall Street Journal. The unemployment rate was unchanged at 3.7%, the U.S. Bureau of Labor Statistics reported Friday. That’s near a half-century low. Meanwhile, hourly pay rose 0.6% last month to an average of $32.82, the report shows.
“I think the PPI pressures have peaked out based on the decline we’ve seen in supply chain problems,” Kleintop said in a phone interview. He said that he’s expecting that the upcoming PPI print may reinforce the overall message of central banks stepping down the pace of rate hikes. “Yield curves are excellent predictors of economic slowdowns, but they’re not very good predictors of when it will happen,” Slimmon said. His “suspicion” is that a recession could come after the first part of 2023.
See: Stock market could see ‘fireworks’ through the end of the year as headwinds have ‘flipped,’ Fundstrat’s Tom Lee says