Read the highlights of this week’s commentary from Helios:
- The S&P 500 notched a new high for 2023 last week, boosted by the November jobs report and the University of Michigan’s Consumer Sentiment report.
- Nonfarm payrolls increased by 199,000, the unemployment rate dropped to 3.7%, and wage growth outpaced estimates.
- Consumers’ inflation expectations fell to 3.1%, a 1.4 percentage point decline from expectations in October.
- The data led to a decrease in bets on rate cuts and an increase in bond yields. This shift represents a reversal from previous expectations of a policy pivot, with the market now betting the Fed may be likely to keep policy restrictive until mid-2024.
- Federal Reserve officials are set to convene for their final meeting of 2023 this week. Although it’s anticipated that there will be no rate changes, their updated quarterly projections might shift the market’s expectations.
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