Stocks closed mixed on Friday with the Nasdaq leading the way with a 0.81% gain, followed by the S&P 500 with 0.25%. Both the Nasdaq and S&P made new all-time highs yet again. And they both closed higher for the week, making it 3 up weeks in a row.

Friday's Employment Situation report beat expectations with a headline gain of 227,000 jobs for November (194,000 in the private sector and 33,000 in the public) vs. the consensus for 211,000 (200,000 private and 11,000 public). The unemployment rate ticked up from 4.1% to 4.2% as expected. The participation rate edged lower from 62.6% to 62.5%. Average hourly earnings were up 0.4%, in line with last month, but above estimates for 0.3%. On a y/y basis it was up 4.0%, same as last month, but above views for 3.9%.

Additionally, September's jobs tally was upwardly revised by 32,000 from 223,000 to 255,000. So was October's with an upward revision of 24,000 from 12,000 to 36,000. (For October, the private sector's original report of -28,000 jobs lost was revised to 'just' -2,000 jobs lost.)

The biggest job gains in November came from the following industries: Health Care with 54,000; Leisure and Hospitality with 53,000; Government employment was up 33,000; Transportation Equipment Manufacturing was up 32,000; and Social Assistance jobs were up 19,000.

Although, it was interesting to note that Retail Trade lost -28,000 jobs.

The larger-than-expected jobs number didn't spook the market as some had feared. When you look at it from a two-month period, it only averaged 131,500 per month for the headline number, and 96,000 per month for the private sector. I'd put that on the lower end of 'good.'

The reason why I'm averaging it over 2 months is because October's tally was skewed due to the hurricanes that impacted the employment survey process, along with a few strikes which also negatively impacted the count. November's numbers saw tens of thousands of previously striking workers return to the labor force. And the hurricane-related surveying challenges were essentially gone.

So November's report had something for everyone: a good enough number that shows the economy continues to expand, while not so high as to worry that things could become overheated. And for that, the belief is the Fed is still on track to cut rates by another 25 basis points when they meet again in 1½ weeks on 12/17-18.

Fed Funds traders ratcheted up their odds of a rate cut with the likelihood now at 85.1%, a sharp increase from just the day before of 70.1%.

The attention will shift back to inflation this week with Tuesday's Consumer Price Index (CPI) (retail inflation), and Wednesday's Producer Price Index (PPI) (wholesale inflation) reports. While the last several reports have shown progress on inflation slowing (if not stalling), it's a far cry from where it was 2 years ago.

But the Fed insists they will remain data dependent. So all eyes will be on those last two inflation reports before the Fed's decision on rates next week.

In the meantime, stocks are having another banner year. YTD, the Dow is up 18.5%; the S&P is up 27.7%; the Nasdaq is up 32.3%; the small-cap Russell 2000 is up 18.8%; and the mid-cap S&P 400 is up 19.8%.

With just 3 more weeks and 2 trading days left in the year, stocks look poised for a strong end-of-year rally.

So make sure you're taking full advantage of it.

See you tomorrow,