On Thursday, weekly unemployment claims data was released, and it revealed that 213,000 people applied for benefits over the past seven days. This was compared to an expected 220,000 claims and was also slightly lower than last week’s 219,000 requests for benefits.
On Friday, the Flash Manufacturing PMI and Flash Services PMI reports were made public. The Flash Manufacturing PMI came in at 48.8, which matched analyst expectations prior to the release. Meanwhile, the Flash Services PMI came in a 57, which was higher than the projected 55.2.
The figures continue to suggest that manufacturing is still struggling to gain traction in the United States, while demand for services is flourishing. Any figure below 50 indicates a contraction in the industry while figures above 50 represent expansion.
Ultimately, this could drive another period of inflation or at least prevent prices from coming down to the Fed’s 2 percent target. Depending on what future data says, the Fed may decide to hold off on future rate cuts or slow the pace of cuts over the next 12 months. Last week, Jerome Powell said that future cuts would be data dependent and that the road to 2 percent inflation would be a bumpy one.
Currently, it’s expected that the Fed will cut interest rates another 25 basis points when the Federal Open Market Committee (FOMC) meets on Dec. 18. However, recent data suggests that this is not a guarantee, and there has been speculation that other central banks may consider holding off on rate cuts as well.
The University of Michigan released its inflation expectation report on Friday morning, and respondents said that inflation would be at 2.6 percent at this point next year. Consumer sentiment came in at 71.8 compared to 74 earlier in November.
For the week, the S&P 500 increased 1.48 percent. The market made a low of 5,862 on Tuesday morning before reversing and hitting a high of 5,972 on Friday.
As with the S&P, the Dow was also up this week as it closed 1.92 percent higher at 44,296. The Dow would make its low of the week on Tuesday of 42,970 before reversing and closing at the high of the week.
Finally, the Nasdaq also finished higher over the past five trading days closing at 19,003. That represents an increase of 266 points or 1.42 percent. Unlike the S&P and Dow, the Nasdaq had a flatter curve as it opened at its lowest point of the week at 18,694 and would test that low two more times by Thursday.
In international news, Canada and Great Britain announced their inflation figures for October with both countries experiencing a slight uptick in CPI data. Great Britain also revealed that retail sales were down .7 percent in October while Canada announced its retail sales figure increased .4 percent.
The upcoming week features the Thanksgiving holiday on Thursday as well as Black Friday, which generally serves as an extension of that holiday. The week will be front-loaded to include the CB Consumer Confidence report on Tuesday as well as the preliminary gross domestic product (GDP) figures on Wednesday. Unemployment claims and the monthly Core PCE Price Index data will also be released on Wednesday morning.