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Small-Cap Russell Leads the Way, Jobs Data to Come

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Three of the four major stock market indices closed in the red today, just as we began today’s session. Only the small-cap Russell 2000, which crossed into the green at the very start of the session, managed to stay above zero the entire trading day. It finished +1.04% today, followed by the Dow, which only missed breakeven by -41 points, -0.11% on the day. The S&P 500 dropped -0.54% and the tech-heavy Nasdaq lost -119 points, -0.84%.

Hawaiian Holdings (HA - Free Report) catapulted +192% today upon news yesterday that it was being acquired by Alaska Air (ALK - Free Report) for $1.9 billion, or $18 in cash. The two regional airlines of the Pacific would improve competition, while both would retain their brand names going forward. Alaska, the acquirer, dropped -14% following this news. Meanwhile, Roche (RHHBY - Free Report) shares gained +3% today on news that it was acquiring weight-loss drug specialist Carmot Therapeutics for $3.1 billion.

In terms of economic reports, we start slowly for a new Jobs Week, but see October Factory Orders come down as expected month over month. In fact, -3.6% was a tad below projections, and the lowest monthly tally all year. This was only the third month with a negative print for Factory Orders in 2023; it hasn’t been a tremendous year for manufacturing productivity with interest rates weighing heavily, but it had still averaged in positive territory until this morning’s report.

Tomorrow morning, we’ll get S&P PMI and ISM Services data for November and Job Openings and Labor Turnover Survey (JOLTS) for October. While S&P PMI figures are expected to stay consistent, slightly above 50 (the demarcation point between growth and loss), ISM Services is looking for a slight boost higher to 52.4%. JOLTS headline data is expected to come down 200K openings to 9.4 million — still an historically high number, but one that is more than 2.5 million below post-pandemic highs.

Obviously, it’s the final trading month of the year, and all four major indices are in the green. It would appear by the tepidness of today’s trading appetite that market participants may have sated its bullishness for now. Perhaps jobs data as the week progresses will help boost sentiment going forward, but likely the risk is to the downside with too-hot employment data moving a Fed scenario for cutting interest rates beyond mid-next year.

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