In addition to these releases, investors are preparing for the forthcoming December Non-Farm Payroll (NFP) report. They’re looking for it to show an increase of 65,000 new jobs, pointing towards positive changes on the economic front. This immensely important report will become the go-to bellwether for all market operators. It speaks to the continued resilience of the labor market. This report is expecting a 0.3% month-over-month and a 3.6% year-over-year increase in Average Hourly Earnings. In addition, it foresees a drop in the unemployment rate to 4.5%, lower than the current 4.6%.
Investors are particularly focused on the December NFP report due to its implications for monetary policy and overall economic health. Such a positive outcome—if there is one—would further deepen the confidence we should take in our ongoing economic recovery. Surprise outcomes could set off heightened turbulence in financial markets. The full report will be released in the coming days and analysts will be eagerly watching what’s inside.
In addition to labor market data, news surfaced regarding a substantial bet placed on Polymarket, an online prediction market where users wager on real-world outcomes using cryptocurrency. One brave trader placed an even bolder bet, risking $32,000. He expects that “Nicky” will leave the corral by the end of January. This was the bet that turned heads when it paid $436,760 on Saturday morning. It produced a superb return of 1,265%, that’s 13.65 times the initial investment!
This bet is all about the movie-like manhunt that ends in the violent arrest of Nicky and his spouse, Celia. Their story has captured the imagination of Americans. In the aftermath of this attempted coup, Delcy Rodríguez was appointed as the new acting President, shifting the political circumstances even more.
Given the rapidly changing economic landscape, recent indicators are pointing to the positive sign of stabilizing input costs. Prices Paid Prices Paid component moderated to 58.5. That means that inflation along the supply chain isn’t growing dangerously fast. This is an encouraging turn of events. In fact, wage growth is finally outpacing inflation—clocking in at an impressive 2.8% as reported by the Bureau of Labor Statistics. Much stronger credit conditions would give additional support to consumer spending and overall economic growth.
Outside of domestic markets, European indices were mixed after a strong day yesterday. Putting aside the turbulence abroad, U.S. markets enjoyed a spectacular, broad-based rally. The Dow Jones Industrial Average recovered by 595 points, or 1.2%. In contrast, the S&P 500 gained just 44 points – a gain of only 0.65%. The Nasdaq Composite joined the party too, increasing by 160 points or 0.7%. These developments are in concert with investor sentiment pivoting into risk appetites chasing growth opportunities while being cognizant of economic data on the horizon.
Further out, the release of the ISM Services Prices Paid component will be an important indication of the economy’s overheating state. Plus, the November JOLTS (Job Openings and Labor Turnover Survey) report coming next week will provide even more detail. The reports will be closely watched by analysts, looking to assess what is happening in the tightening labor market and developing inflationary pressures.