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Ahead of the last trading day of 2023 — by all accounts a terrific year for the stock market, and rather unexpected — we’re flat for the second day in a row. Based on the time of year, we expect low volume today, and yet we don’t currently see extensive gains-booking sending markets lower at this hour. As we already know, the Nasdaq 100 has outperformed any year of the 21st century so far, +56%. The Nasdaq overall is +44% year to date, its best performance in 20 years.
The S&P 500 is up +25% for the year and the small-cap Russell 2000 is +18%, with the Dow taking up the rear at +14%. This is up nicely from the -8% posted in 2022, but slightly off the pace of 2021’s excellent +18%. North of 38K, we’re at record highs on the Dow; for the S&P, we’re close to new all-time highs as well. The Nasdaq has a bit more room to run before it reached November 2022 all-time highs.
As always, we look for clues as to where things are headed in 2024, and next week brings a fresh Jobs Week. Between JOLTS, ADP, Jobless Claims and Non-farm Payrolls, by this time next week we will have a much better understanding of how the domestic labor market is holding up. We’ve seen impressive results in 2023 — especially considering a plurality of experts were lamenting a deep recession at some point in the past six months — and we see these continuing through at least the December figures.
The Job Openings and Labor Turnover Survey (JOLTS) for November is expected to show 8.7 million jobs still available, which remains historically high despite admirable job gains throughout the past year — and lows not seen since the first quarter of 2021. We’re well off the 12+ million openings from back in March of 2022, and perhaps likely to dwindle from the previous read, but still with plenty of opportunity for those looking for gainful(?) employment.
Private-sector payrolls from Automatic Data Processing (ADP - Free Report) have been plateauing around 100K new jobs posted per month over the past quarter year. This is still above the necessary monthly job gains we need to offset retiring baby boomers, but we’re notably off the highs of 455K set back in June of this year. This appears to have been an outlier, however; private-sector payrolls weren’t routinely that high since the heart of the Great Reopening in 2021.
The Employment Situation report from the U.S. Bureau of Labor Statistics (BLS) last time around reached 199K, between the 472K reported in January of 2023 and the 105K reported for June. These again support the large influx of new retirees, although Labor Force Participation numbers have remained stubbornly below 63% for an extended period. Aside from this tally, Wage Growth is another key element of the labor market in terms of inflation creep; wages have climbed +4% year over year as of the November print.
The Unemployment Rate last came in at 3.7% — historically robust but still higher than the 3.4% levels registered in January and April of this past year. We’ve now been sub-4% on unemployment for almost exactly two years. This is an impressive feat when we consider that during the heart of the Covid pandemic, we were north of 15% unemployment, nationwide. It would be hard to expect this monthly number to recede further over the next few months, but staying more or less where it is will let the Fed know it is satisfying at least half of its dual mandate.
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JOLTS Number Expected to Remain High
Ahead of the last trading day of 2023 — by all accounts a terrific year for the stock market, and rather unexpected — we’re flat for the second day in a row. Based on the time of year, we expect low volume today, and yet we don’t currently see extensive gains-booking sending markets lower at this hour. As we already know, the Nasdaq 100 has outperformed any year of the 21st century so far, +56%. The Nasdaq overall is +44% year to date, its best performance in 20 years.
The S&P 500 is up +25% for the year and the small-cap Russell 2000 is +18%, with the Dow taking up the rear at +14%. This is up nicely from the -8% posted in 2022, but slightly off the pace of 2021’s excellent +18%. North of 38K, we’re at record highs on the Dow; for the S&P, we’re close to new all-time highs as well. The Nasdaq has a bit more room to run before it reached November 2022 all-time highs.
As always, we look for clues as to where things are headed in 2024, and next week brings a fresh Jobs Week. Between JOLTS, ADP, Jobless Claims and Non-farm Payrolls, by this time next week we will have a much better understanding of how the domestic labor market is holding up. We’ve seen impressive results in 2023 — especially considering a plurality of experts were lamenting a deep recession at some point in the past six months — and we see these continuing through at least the December figures.
The Job Openings and Labor Turnover Survey (JOLTS) for November is expected to show 8.7 million jobs still available, which remains historically high despite admirable job gains throughout the past year — and lows not seen since the first quarter of 2021. We’re well off the 12+ million openings from back in March of 2022, and perhaps likely to dwindle from the previous read, but still with plenty of opportunity for those looking for gainful(?) employment.
Private-sector payrolls from Automatic Data Processing (ADP - Free Report) have been plateauing around 100K new jobs posted per month over the past quarter year. This is still above the necessary monthly job gains we need to offset retiring baby boomers, but we’re notably off the highs of 455K set back in June of this year. This appears to have been an outlier, however; private-sector payrolls weren’t routinely that high since the heart of the Great Reopening in 2021.
The Employment Situation report from the U.S. Bureau of Labor Statistics (BLS) last time around reached 199K, between the 472K reported in January of 2023 and the 105K reported for June. These again support the large influx of new retirees, although Labor Force Participation numbers have remained stubbornly below 63% for an extended period. Aside from this tally, Wage Growth is another key element of the labor market in terms of inflation creep; wages have climbed +4% year over year as of the November print.
The Unemployment Rate last came in at 3.7% — historically robust but still higher than the 3.4% levels registered in January and April of this past year. We’ve now been sub-4% on unemployment for almost exactly two years. This is an impressive feat when we consider that during the heart of the Covid pandemic, we were north of 15% unemployment, nationwide. It would be hard to expect this monthly number to recede further over the next few months, but staying more or less where it is will let the Fed know it is satisfying at least half of its dual mandate.