After a stronger-than-expected jobs report sparked worries about more aggressive Fed tightening, U.S. share markets recovered losses to end Friday flat and mixed. Following a strong surge on Wednesday, markets nevertheless managed to report gains for the week, with the Dow rising by 0.2%, the S&P 500 increasing by 1.1%, and the Nasdaq gaining by 2.1%. This week saw a sharp decline in U.S. Treasury yields, with the 10-year note’s yield reaching a two-month low of 3.5% on Thursday. The two-year note now yields nearly 80 basis points (bps) more than the 10-year note, deepening the inversion of the yield curve, which is typically seen as a sign of an impending recession.
Prior to rising to close the week near $80 per barrel in anticipation of an OPEC and allies meeting on Sunday, the price of West Texas Intermediate (WTI) crude, the U.S. benchmark, hit a new year-to-date low of $73.50 per barrel on Monday. Meanwhile, officials from the European Union decided to set a $60 per barrel price cap on Russian oil.
The performance of the U.S. manufacturing and service sectors will be revealed through surveys from S&P Global and the Institute for Supply Management (ISM) called the Purchasing Managers’ Index (PMI) due out the following week. In order to track inflation from the perspective of firms that produce goods and wholesalers, the Bureau of Labor Statistics (BLS) will publish its November reading of the Producer Price Index (PPI) on Friday. A timely update on consumer confidence will be provided by the preliminary December reading of the Consumer Sentiment Index (MCSI) from the University of Michigan, which will be released on Friday as well. Among the businesses reporting earnings the following week are Costco, Broadcom, Oracle, AutoZone, Gamestop, and Lululemon Athletica.
