Markets Brace for Liftoff

After a quiet and abbreviated post Thanksgiving day trading session on Friday, investors re-emerged Monday but seemed to lack much in the way of enthusiasm. Market indices meandered in negative territory through much of the session and closed at session lows. The S&P 500 lost 0.44% while the Dow Industrials lost 0.42% and the NASDAQ slipped a more modest 0.35%. As expected, volume returned. The NYSE saw volume jump by 45.23% while the NASDAQ volume increased by 19.92%.

Sector leadership was provided by Health Care (+0.84%) and Consumer Discretionary (+0.74%). Industrials (-0.37%), Energy (-0.57%) and Technology (-0.51%) were the under performers on the day. Internals, along with index price action, were modestly negative on both the NYSE (9-8) and NASDAQ (9-8).

Much of the drag provided to markets came from weaker than expected retail sales over the holiday weekend but interestingly, as mentioned above, the Consumer Discretionary sector actually outperformed the broader market. The economic data that investors were treated to yesterday also did not provide much of a reason for cheering. Pending home Sales came in significantly less than expected and the Chicago area factory activity was weaker than expected.

Yesterday’s weak start to the week is subject to change. Not only do we have a great deal of data on the docket, we are in the midst of the holiday shopping season, earnings are still rolling in and there are no less than eleven speeches by Federal Reserve officials scheduled for this week. Of the eleven, three will be given by Fed Chair Janet Yellen.

Investor attention will gradually shift from day-to-day retail measures, earnings, economic data and even Fed speak over the week to Friday’s November jobs data. Consensus expectations are calling for the unemployment rate for November to come in at 5% – unchanged from October with non-farm gains of 190k and private payrolls gains of 185k.