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Dec 05 2016

U.S. equity markets look to continue their rally

On the heels of a strong November jobs report and the lowest unemployment rate in a decade, U.S. equity markets look to continue their rally this week. Markets are once again defying conventional wisdom and proving many ‘talking-heads’ wrong, as futures point to a higher open in spite of Sunday’s referendum vote by Italians to stick with their current political structure. President elect Trump’s spat with China over the weekend doesn’t appear to unhinge investors either, as consensus that the Fed will raise rate next week is almost unanimous. The real question for market participants is ‘how many dominos can fall before markets react negatively?’

 

Looking Ahead:

Economic data and corporate earnings will be the ultimate drivers of market performance, and in the short-term these appear to be sufficiently healthy to support a continuation of the rally. However, February’s German elections and the possibility of a cyclical slow-down in Q1 will likely be a bit much for market participants, as such investors are wise not to become overly exuberant.

 

This Week’s Market Moving Events:

Monday: Consumer Spending, PMI Services, ISM non-Manufacturing, Labor Market Conditions

Tuesday: International Trade, Productivity & Cost Index, Redbook report, Factory Orders

Wednesday: Mortgage Applications, JOLTS Report

Thursday: Jobless Claims, Chinese Data

Friday: Consumer Sentiment, Wholesale Trade