As the clock ticks down on the final trading session of the year, investors are bracing for a potentially volatile last hurrah. While a delayed November jobs report and key inflation reading are set to dominate the headlines, they’re not the only factors that could gin up market turmoil.
Economic Indicators to Watch
The jobs report, which is typically released on the first Friday of the month, will now be published on the last week of December. This delay could create uncertainty and fuel market anxiety, as investors try to gauge the strength of the US economy. The Bureau of Labor Statistics’ (BLS) November employment numbers are expected to show a modest increase, but any significant deviation from expectations could send shockwaves through the markets.
Inflation Fears
Inflation data is also set to play a major role in the final trading session of the year. The Consumer Price Index (CPI) report, which measures the rate of inflation, is expected to show a slight increase. However, any sign of rising prices could heighten concerns about inflation, potentially leading to a sell-off in stocks. The Federal Reserve has been closely watching inflation data, and a sharp increase could prompt the central bank to reconsider its interest rate trajectory.
Earnings Season to Wind Down
Earnings season, which has been a major driver of market sentiment in recent months, is set to wind down in the final trading session of the year. While the majority of S&P 500 companies have already reported their quarterly results, some high-profile names are still due to release their earnings. These companies, including tech giants and consumer staples, will provide investors with a final glimpse into the health of corporate America.
Market Volatility
The final trading session of the year is often a time for market volatility. With investors looking to book profits and lock in gains, trading volumes can increase, leading to tighter stock prices and higher volatility. The CBOE Volatility Index (VIX), which measures market fear and uncertainty, has been trending higher in recent weeks, suggesting that investors are becoming increasingly risk-averse.
What to Watch Next
As the trading year comes to a close, investors would do well to keep a close eye on the following key events in 2024:
- The Federal Reserve’s interest rate decisions and guidance
- Earnings season, which is expected to kick off in early January
- The release of the BLS’s January employment report
- Any significant developments in the Ukraine-Russia conflict and its impact on global trade
Conclusion
As the final trading session of the year draws to a close, investors are bracing for a potentially volatile last hurrah. With key economic indicators and inflation data set to dominate the headlines, it’s essential to stay informed and adjust your portfolio accordingly. While it’s impossible to predict with certainty what the markets will do, being prepared for any eventuality is key to navigating the complex and ever-changing world of finance.
