Market Rethink Begins as Jobs Week Kicks Off

According to Yahoo News, the first full week of December has seen a re-think in the markets following a strong November that brought new year-to-date highs everywhere except the small-cap Russell 2000 index. Most of the impactful data this week is still ahead, finishing with a flourish on Friday with the Employment Situation report from the Bureau of Labor Statistics (BLS) and the Household Survey. Today marks the start of so-called “Jobs Week,” with Job Openings and Labor Turnover Survey (JOLTS) for October out at 10 am ET. In between, we’ll see private-sector payrolls from ADP ADP tomorrow and Weekly Jobless Claims Thursday. Presumably, we’re still in “bad news is good news” territory: weak jobs numbers will keep investors confident that the Fed will make no moves higher on interest rates. Other than the JOLTS numbers later this morning, we’ll also take a look at S&P Services PMI for November (expected to stay even at the tepid growth level of 50.8) and ISM Services (expected to gain 60 basis points [bps] to 52.4% last month). Levels above 50 indicate growth for both of these reports; we do not expect numbers below this level on either — but if we get them, the odds of a recession in 2024 will suddenly, if not acutely, increase. Ahead of today’s open, we see fiscal Q1 earnings results for AutoZone AZO come in better than expected: earnings of $32.55 per share easily surpassed the $31.01 expected, and the $27.45 per share reported in the year-ago quarter. Revenues of $4.2 billion also slid past the $4.17 billion in the Zacks consensus, for a year-over-year gain of +5.1%. The company also continued its aggressive buyback initiatives, repurchasing $1.5 billion in shares over the quarter.