December 6th Market Overview

Happy Friday everyone.

Markets are up today after November's jobs official report comes in. It showed strong but not overheating economic growth.

The labor market data, coupled with strong consumer sentiment figures and a Friday afternoon margarita - is providing fresh momentum going into the weekend.


Let's dig in...

Executive Summary

• S&P 500 and Nasdaq Composite reached new all-time highs, driven by robust job numbers and tech sector strength
  

• November payrolls beat forecasts at 227,000 vs 214,000. Gains were notable in healthcare and leisure.
  

• Gaming stocks push to record levels. The VanEck Video Gaming ETF rose for 14 straight sessions.
  

• Bank of America’s Consumer Survey shows high consumer confidence, especially in buying vehicles.

Market Overview

All major indices posting solid gains today.

Key Market Drivers

1. Labor Market Resilience: Unemployment rate at 4.2% with broad-based job gains across sectors
   

2. Consumer Confidence: University of Michigan survey shows improved sentiment despite higher inflation expectations
   

3. Sector Rotation: Consumer discretionary leads weekly gains at 5%, while energy and utilities lag
   

4. China Stimulus Hopes: Asian markets rally ahead of key economic policy meeting next week

Stock Spotlight

• $LULU ▲ 18%: Beat Q3 estimates with strong holiday guidance; Citi raises PT to $380
  

• $DOCU ▲ 27%: Q4 revenue forecast of $758-762M exceeds $756M consensus
  

• $PETC ▲ 16.7%: Reports smaller-than-expected Q3 loss of 2 cents vs 4 cents estimated
  

• $RBLX ▲ 18%: Leading gaming sector surge with seven consecutive positive sessions
  

• $APP ▲ 22%: Continues remarkable run, up 936% year-to-date

Big Name Updates

• $AMZN: Strategic shift in AI chip development, halting Inferentia to focus on Trainium platform
  

• $MSFT: Negotiations with OpenAI regarding ‘AGI clause’ modification for additional funding
  

• $META: Trading at record levels since 2012 IPO
  

• $AAPL: Reaches all-time highs since 1980 market debut
  

• $IBM: Achieves highest levels since 1962 NYSE listing

Other Notable Company News

• $PLTR: Expands defense partnership with Shield AI for autonomous military systems
  

• $ACN: Goldman upgrade to Buy with $420 PT, citing NVIDIA partnership benefits
  

• $HOOD: Goldman initiates coverage with Buy rating, $46 PT as “Asset Under Custody Compounder”
  

• $DG: Upgraded to Buy on early success of Back to Basics strategy, PT $95
  

• $CVX: Projects FY25 capex of $14.5B-$15.5B, down from FY24’s $15.5B-$16.5B

Sector Watch

Bond Market

Rates remained stable as traders increased bets on a potential rate cut this month to 88%. The not-too-hot, not-too-cold jobs report reinforced market expectations for monetary policy easing, while maintaining a cautious eye on inflation indicators.

Policy Watch

Market sentiment strengthened as traders interpreted the jobs data as supporting the Fed’s potential pivot, with futures now pricing an 88% probability of a rate cut this month.

The labor report showed particular strength in healthcare and social assistance (+72,300 jobs) and leisure/hospitality (+53,000 jobs).

• Cleveland Fed President Hammack expects slower pace of rate cuts, citing persistent inflation and stronger-than-expected labor market
  

• Trump administration names David O. Sacks as White House AI & Crypto Czar to guide policy and establish U.S. leadership
  

• Former Senator David Perdue selected as next U.S. ambassador to China
  

• U.S. National Tsunami Center issues warning after 7.5 magnitude earthquake strikes California
  

What to Watch

1. Central Bank Decisions: Fed meeting approaches with market pricing in high probability of rate cut

• Monitor Cleveland Fed President Hammack’s comments on gradual approach

• Watch for additional Fed speaker commentary on inflation persistence

2. China Policy Meeting: Key economic planning session to discuss 2025 targets

• Potential stimulus measures and growth targets

• Impact on global markets and commodity demand

3. Consumer Sentiment: Following strong Bank of America survey data

• Vehicle purchase intentions remain elevated at 43%

• Home purchase plans declined to 19% from 21%

4. Tech Sector Momentum: Gaming stocks showing particular strength

• Monitor VanEck Gaming ETF after 14-day winning streak

• Watch for continuation in mega-cap tech leadership

Thanks for reading 🙂

- John