US markets recap: Key ideas for the week of December 2 (Part 3 of 3)
All about payrolls
GDP data is released on Thursday. Expectations are for 2.9% annualized growth in the third quarter, though this indicator is pretty backward-looking and likely won’t be the biggest source of volatility this week. That designation belongs to non-farm payrolls, released on Friday along with the unemployment rate. Expectations there are for 185 thousand and for the unemployment rate to fall back down to 7.2%.
If either miss, Friday could be interesting.
Outlook remains positive, staying bullish on U.S. equities
U.S. stocks have had a monster year, but there are still a lot of investors on the sidelines. U.S. stock funds have seen inflows, but they’re nowhere near peaking yet. The Fed knows it’s the only game in town, and it’s doing everything it can to calm markets. Although U.S. stocks are more expensive than other developed markets, macro factors favor the U.S. versus Europe in the medium term.
Within U.S. equities, financials and discretionary could see continued outperformance, and utilities could continue to lag against upward pressures in rates.
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