The opinions expressed below are my own and do not necessarily represent those of Visdom Investment Group, LLC.
NFP times two
Nonfarm payrolls data is back on schedule and this morning the markets saw the release of both the November and October payrolls numbers. October was terrible (-105k vs +108k prior). November was ok (+64k vs +50k est & -105k prior). Equity futures didn’t react much but Treasuries did. Yields dropped quickly on the October numbers and then ramped up on the November numbers. Eventually things settled down and yields were higher on the day, around the open of equity trading. Over the rest of the day, yields came down quietly and consistently. That didn’t help the equity bulls at first as the S&P slid modestly until bottoming around 1 PM, down about 56 points. From there, the bulls asserted control over the tape and pushed the index almost all the way to unch’d. We faded just a bit into the close and finished with a small loss. The intraday drama was minor and the day was a snoozer.
Stepping back from the micro, the overall market landscape is even less interesting than the quiet close. Things haven’t changed much. The recent issues on the front burner remain although the Bitcoin situation is less potent. Today’s rally in the coin helped but the market is getting less and less nervous about the spillover potential. Whether that’s foolish or prescient remains to be seen.
We are mid-December and heading towards the finish line of 2025. Things are quiet, which has tended to help the longs but the rally into year-end hasn’t begun yet. When’s the fabled rally going to get going? The S&P is up 15.6% for the year and down 0.7% for the month. 2025 will be the third positive year in the current bull market.
The current narrative is that we’re in the early/middle of a typical bull market. So investors are expecting *years* of further gains. Finishing 2025 with a bit more upside is par for the course according to consensus.
But where is it? When’s it going to happen?
I assume soon. The January effect should be significant as we enter year four of a lucrative bull market. One would expect the market to front-run it.
See you tomorrow.
-Mike
Visdom Market Commentary
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