The stock market is gearing up for a pivotal week filled with crucial economic data that might influence a year-end rally. Several important reports are set to be released, particularly employment and inflation figures that were delayed due to the recent government shutdown. November’s nonfarm payrolls, which were initially scheduled for early November, will be available on Tuesday, December 16. Following that, October retail sales data and the November consumer price index (CPI) will be unveiled on Thursday, December 18. Investors on Wall Street are hoping that these statistics will validate their recent suspicions about the economy. In essence, they are anticipating signs of slowing job growth amid a “no jobs, no layoffs” narrative, while inflation continues to linger below the Federal Reserve’s 2% target—both suggesting some economic softness. However, if the numbers align with expectations—or better yet, surprise positively—it might entice buyers just in time for the holiday season. “If we get consistent data, this market will continue to rise through the end of the year,” noted Jay Woods, chief market strategist at Freedom Capital Markets.
Yet, any unexpected results next week should be approached cautiously; it’s possible the figures may be skewed or incomplete due to delays in data collection. For instance, October payroll figures will be factored into November’s announcement. The consensus forecast from FactSet anticipates a modest increase of 40,000 nonfarm jobs in November, which pales in comparison to the 119,000 rise reported in September, post-government reopening. Moreover, some data that investors analyzed during the data blackout suggested that the job market might be faltering more than anticipated. Fed Chairman Jerome Powell mentioned the potential for “systematic overcounting” affecting recent job growth numbers. Meanwhile, FactSet projects that year-on-year headline inflation could tick up to 3.1% in November.
According to the CME FedWatch tool, Fed officials are anticipating just a quarter-point rate cut by 2026. Interestingly, higher stock prices could pose risks too, as Moody’s Analytics indicated that stocks might face a correction if they don’t meet performance expectations. Historically, December serves as the second-best month for the S&P 500, with an average gain of 1.3% since 1929. Most of these gains tend to occur later in the month, just below the significant 7,000-point mark. In a notable move, the Dow Jones Industrial Average achieved a new closing high recently, although tech stocks lagged after disappointing quarterly updates from Oracle and Broadcom. This week saw the Dow as the only index gaining traction; the other major indexes displayed mixed results, with one rising 1% and the Nasdaq slipping 1.6% from its peak. The rotation into underperforming sectors might reverse should next week’s economic reports create uncertainty regarding the economic outlook. “But the market will hold its own until technology can take off and propel us higher,” Woods stated.
Key upcoming releases include: Consumer Price Index (November) at 8:30 a.m., Real Earnings (November), Unemployment Claims for the week ending December 13, and earnings reports from Nike, FedEx, Cintas, and Darden Restaurants on Friday, December 19. Additional earnings reports expected include Lamb Weston, Paychecks, and Conagra Brands.
