The stock market reached new milestones on Friday, continuing a bullish trend as November’s employment report provided a balanced outlook. The S&P 500 advanced 0.25% to close at 6,090.27, while the tech-heavy Nasdaq gained 0.81% to finish at 19,859.77. In contrast, the Dow Jones Industrial Average slipped by 123.19 points, or 0.28%, to end at 44,642.52.
Both the S&P 500 and Nasdaq closed at record highs and logged their third consecutive week of gains, increasing by 0.96% and 3.34%, respectively. The Dow, however, suffered a 0.6% decline over the same period. The U.S. labor market added 227,000 nonfarm payroll jobs in November, surpassing the Dow Jones estimate of 214,000 and significantly improving from October’s revised increase of 36,000.
The unemployment rate rose slightly to 4.2%, aligning with expectations. This data reflects an 85% likelihood of another Federal Reserve rate cut in two weeks, as indicated by fed funds futures trading data from CME Group. Luke O’Neill, a portfolio manager at Catalyst Funds, commented, “The labor market is not weak but is definitely softening, giving traders confidence in a 25 basis-point rate cut at the upcoming meeting.
We’re in a reasonably solid economic position, but there’s enough softening to give the Fed room to lower rates.”
In other market news, the S&P 500 is expected to continue rising in 2025. HSBC predicts the index will reach 6,700 by the end of the year, representing a potential 10% increase from current levels.
Stock futures hit record highs
We anticipate earnings growth to be the main driver of next year’s equity returns,” said analyst Nicole Inui. She also forecasted a robust yet slowing U.S. economy and potential Federal Reserve rate cuts totaling 125 basis points as inflation eases. Black Friday shopping shifted notably toward online platforms, according to Bank of America.
Economist Aditya Bhave noted a 7.9% increase in online retail spending compared to last year, despite a slight decline in brick-and-mortar sales. Also, consumer surveys from Bank of America indicated a sustained high level of intention to purchase new vehicles, with 43% of respondents planning to buy within the next 12 months. Video game stocks surged, with the sector on track for a record 14th consecutive positive session.
The sector ETF, ESPO, approached new highs, with significant performance from key players like Unity and AppLovin, which saw substantial gains over recent weeks. In international news, the South Korean won fell 0.6% against the dollar ahead of a parliamentary vote on the potential impeachment of President Yoon Suk Yeol. The won has declined 2% against the dollar over the week, reflecting market uncertainty following political turbulence.
Despite various global economic concerns, UBS remains optimistic about global equities for the next year. This positive outlook is bolstered by anticipated earnings growth and a gradual easing of inflationary pressures.
