Stocks Were Closed Yesterday, All Eyes On This Morning's Employment Situation Report The stock market was closed yesterday in a national day of mourning in honor of former President Jimmy Carter's passing away. In addition to widespread coverage of his funeral, there was also widespread coverage of the devastating fires in LA. You cannot put a price tag on the tragic loss of life. But the costs of these fires will be enormous. Insurance companies will pay out claims. And people and businesses will have to rebuild. It's still too early to assess the full extent of the damage as the fires continue to rage. But people are beginning to estimate the extent of the financial cost. And once the fires are contained, there will be plenty of speculation on the impact it will have on the economy, industries and the people affected. In other news, yesterday's Challenger Job-Cut Report showed a decrease in announced layoffs at 38,792 vs. last month's 57,727. Today we'll get Consumer Sentiment and the Baker Hughes Rig Count Report. We'll also get the long-awaited Employment Situation report by the Bureau of Labor Statistics (BLS). The consensus is looking for 157,000 new jobs to have been created in December (130K in the private sector and 27K in the public). The unemployment rate is expected to stay the same at 4.2%. And average hourly earnings are expected to come in at 0.3% m/m vs. last month's 0.4% pace, while the y/y rate comes in at 4.0%, in line with last month. After today's employment report, the market will turn its attention to next week's PPI and CPI inflation reports on Tuesday, 1/14 and Wednesday, 1/ 15. Even though there's a 93.1% likelihood that the Fed will NOT cut rates at the conclusion of their next FOMC meeting on January 29, both the jobs numbers and inflation reports are key data points in shaping monetary policy. And while the Fed confirmed in Wednesday's FOMC minutes that they are willing to take their time on the next rate cut in order to assess the economic outlook, they insist they will remain data dependent. So today's jobs report and next week's inflation reports will be looked at closely by both the Fed and investors. In spite of the "gradual approach" the Fed has adopted, they are still forecasting 2 rate cuts (presumably by 25 basis points each) for 2025. And another 2 cuts in 2026. But things can change. Last year they were forecasting 4 rate cuts in 2025. And anything that could potentially interfere with the soft landing the Fed has so far helped guide could change their timeline and magnitude. At present, the economy is doing well. Corporate earnings estimates are trending up. And household incomes remain near record highs. All good news for the market. With one more trading day left in the week, all of the major indexes are currently down for the week. But that could very well change after today's jobs report. Either way, going into today, all of the indexes are up YTD. Best,  Kevin Matras
Executive Vice President, Zacks Investment Research | 
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