Blast of Data Start Month Following Mixed November

0:05Welcome to the Schwab Market Update Podcast, where we prepare you for each trading day with a recap of recent news and a look at what's ahead. I'm Keith Lansford, and here is Schwab's early look at the markets for Monday, December 1st. The final month of the year kicks off with a quiet schedule Monday that belies busyness ahead. Today includes important U.S. manufacturing data, but other than that, the decks are relatively clear. Things start to pick up in a big way by midweek, with several labor market readings and a handful of tech and retail-related earnings before Friday's key inflation report and consumer sentiment.

0:46The inflation data due before Friday's open is the Federal Reserve's favored personal consumption expenditures, or PCE, price index for September. Time just ahead of next week's Fed meeting, it's among the last milestone data points the Fed will get before it makes a rate decision, though the data are two months old. Hopes for a rate cut powered the market last week and sent Treasury yields down to one-month lows, briefly under 4 % for the 10-year Treasury note. As of this morning, futures trading dialed in 87 % chances of a December rate cut a week from Wednesday, but that's not necessarily set in stone.

1:23Inflation remains stubbornly high, and Friday's PCE report isn't expected to show much improvement, with early expectations at 0.3 % for headline PCE and 0.2 % for core, which excludes volatile food and energy prices. Fed speakers the last two weeks were more dovish in tone, but many still sounded hesitant about easing policy after cutting rates in September and October. The current scorecard suggests that even if the Fed cuts rates again from the current range of 3.75 % to 4%, it could be a divided vote. Odds of a rate cut increase further following the Fed's Beige Book last Wednesday that showed more signs of a cooling labor market, as hiring was mostly for replacements, not expansion.

2:08The report also pointed towards slower consumer spending and modest wage growth. This is a quiet week for Fed policymakers ahead of next week's meeting. However, last week featured media reports suggesting the White House is soon going to announce its pick for Fed Chairman Jerome Powell's replacement. His term expires next May 15th. If the administration chooses someone considered more dovish, it could push up odds of rate cuts later in 2026.

2:39There's no nonfarm payrolls report next week due to the shutdown. Still, investors can get a sense of the labor market through ADP's November private employment report Wednesday before the open and the challenger job cuts report for November early Thursday. Last week, ADP said jobs growth fell by 13 ,500 on average during the four weeks through early November. The October Challenger report saw layoffs surge 183 percent from September amid what it called AI adoption, softening consumer and corporate spending and rising costs. The question is whether that was a one-month blip or something that will be extended and how government employee layoffs might factor into the November report.

3:24Today's data feature an update on the U.S. manufacturing economy after a mixed picture from several regional reports recently. The November ISM Manufacturing Index, due at 10 a.m. Eastern Time, is expected to show only a mild rise to around 49, according to analysts, from last month's 48.7. Anything below 50 indicates contraction. There was manufacturing data from China over the weekend, which investors likely will eye this morning for any signs of improvement after last month's trade deal between China and the U.S. Markets spent most of last week in an optimistic mode, but Wall Street might be vulnerable to selling if data depicts accelerating economic weakness.

4:06earnings this week feature a mix of mostly smaller firms while Marvell technology tomorrow after the close and salesforce after wednesday's close could provide different views of the churning ai market last time Marvell reported back in late august the company's outlook disappointed investors sending shares down double digits one concern was the what the firm called lumpiness in demand from cloud providers, CNBC reported at the time. Investors will likely listen closely to Marvell's call for any signs of whether that lumpiness smoothed out or got worse. The S &P 500 index eked out a tiny November gain by climbing moderately in a shortened post-holiday session Friday, while Treasury yields inched up.

4:52The Nasdaq 100 finished up on Friday as well, but fell about 1.6 % for the month, making November the first slide for the Tech Heavy Index since April. Though Friday's gains were the fifth session in a row of positive price movement, it's unclear how much conviction was behind the Friday rally in a short, low-volume session. For stocks, last week was the strongest Thanksgiving week since 2012, Briefing.com noted. The 10-year yield remained near one-month lows, just above 4.01 percent by the end of the week. Last week's decline from recent highs of around 4.15 % supported risk-on sentiment and led to gains in race-sensitive areas, especially small caps.

5:34The Russell 2000 Index was up 8 % over the last week by late in Friday's session. Tech and AI-linked sectors led gains last week, and semiconductors were standout performers, up 8 % in a week and back above the 50-day moving average. There's been a lot of upside call buying in the chip stocks, particularly NVIDIA and Marvell. From a breadth perspective, seven of 11 S &P 500 sectors had 50 % or more of their shares trading at or above their 50-day moving averages by midday Friday, with leaders including health care, utilities, energy, materials, and financials. Cyclical and rate-sensitive sectors are mixed in terms of breadth.

6:16Market breadth can help investors gauge strength or weakness. Sector Action Friday continued the week's earlier pattern of broad-based gains. Ten of 11 S &P sectors rose on the day, while every sector gained over the prior week, led by communication services and consumer discretionary. Friday saw energy grab the brass ring quite easily, thanks to more than a 1 % jump in crude prices after their descent earlier that week. Traders bid up oil ahead of Sunday's OPEC meeting. In corporate news, Amazon holds a conference in Las Vegas this week that could help investors get a better understanding of cloud and AI infrastructure direction, Briefing.com said.

6:59Checking Friday's active individual stocks, crypto-related firms Circle Internet Group climbed more than 9 % after S &P Global downgraded Circle's rival stablecoin issue Tether to weak. week. Walmart climbed more than 1 % as investors anticipated solid Black Friday and Cyber Monday holiday shopping. Other consumer stocks also performed well Friday, particularly Amazon, Chewy, and MGM resorts. Semiconductor and related stocks had a solid day to end the month with strength in Super Microcomputer, Applevin, ASML, Constellation Energy, and advanced micro devices. NVIDIA continued to struggle, however, falling 1.8 % and finishing down roughly 12 % for November, as investors appeared to turn toward competitive stocks in the space.

7:50Those included Alphabet, shares of which barely budged Friday but ended up about 14 % for the month. Intel didn't have an impressive November, but did go out on a positive note, rising more than 10 % Friday following a post from an influential market analyst saying Intel could begin shipping Apple's low-end M processor as early as 2027. The Dow Jones Industrial Average rose 289.30 points Friday, or 0.61%, to 47 ,716.42. The S &P 500 index added 36.48 points or 0.54 % to 6 ,849.09. And the Nasdaq Composite gained 150.99 points or 0.65 % to 23 ,365.69. For the week, the Dow Jones Industrial Average rose 3.18%.

8:48The S &P 500 index climbed 3.73 % and the Nasdaq Composite rose 4.91%. This has been the Schwab Market Update podcast. To stay informed, visit www.schwab.com slash market update or follow us for free in your favorite podcasting app. And if you like what you've heard, please consider leaving us a rating or a review. It really helps new listeners find the show. Join us for another update tomorrow.

9:25For important disclosures, see the show notes and schwab.com slash market update podcast.