Tech was back this week as Advanced Micro Devices unveiled its newest artificial intelligence chip and Alphabet released its latest AI model . Friday’s rally pushed the S & P 500 to a new 2023 high as the broad market index, the Dow and the Nasdaq all extended their weekly winning streaks to six straight. Last week, we saw what looked to be the beginning of a rotation out of tech. However, we weren’t quite convinced it would be sustainable. As it turns out, it may well have been a head fake. While the updates from AMD and Alphabet certainly helped the Nasdaq reclaim the leadership position, we also got several key economic reports leading up to Friday’s November employment report that shouldn’t give the Federal Reserve any reason to step off the sidelines. Last Monday, the October factory orders report came in a tick lower than expectations. On Tuesday, the November ISM Services results were slightly ahead, while job openings in October declined to their lowest level in over two years. Wednesday brought the November ADP employment report , which came in lower than expectations at 103,000. In addition to a weak headline reading on hiring at U.S. companies, we saw a 5.6% increase in annual pay, the smallest gain since September 2021. We always caution not to read too much into the ADP data as a means of predicting the government’s jobs report , which came Friday and showed modestly stronger than expected November nonfarm payrolls growth of 199,000. While October’s 150,000 additions were unchanged, September’s total was revised lower by 35,000 to 262,000. Additionally, the November unemployment rate fell to 3.7% when it was forecast to hold steady. But, perhaps the most important metric of all as far as the market is concerned revealed wage inflation right in line with estimates at 4% growth. Putting it all together, we’re certainly getting a mixed picture of the economy with some areas proving more resilient than others. However, we think it’s something of a…
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