It may have been a shortened week for trading on Wall Street, but the stock market continued to reach new heights. The S&P 500 posted its best month since June, closing out November just shy of a record high and with this benchmark on track for annual gains of more than 25%.
As traders head into the final 21 trading days of 2019, they'll inevitably be reminded of last year. In just over three weeks in December 2018, the S&P 500 lost almost 15% and at its worst was down nearly 20% from an all-time high months before.
For now, a repeat of 2018 doesn't appear likely. There's been incrementally positive news in the ongoing U.S.-China trade saga, as President Donald Trump said Tuesday both countries are close to reaching a deal.
In the week ahead, Wall Street will be focused on the labor market, with the much-watched jobs report for November due Friday. In addition, a monthly report about vehicle sales is scheduled for release on Tuesday, and we're in a time of year that could be big for car sales.
Here's what to watch in the stock market during the week ahead — and how the news could affect your bottom line.
What's happening: The Department of Labor's monthly employment report is scheduled for release on December 6, and Wall Street closely tracks the number of nonfarm jobs created in the previous month. Economists currently project that employers added the most jobs since August, and that the unemployment rate held steady at 3.6%.
Why it matters: On average, employers have added 167,000 jobs each month this year, the lowest since 2010. Sluggish hiring gains are symptomatic of the weaker economic growth that led the Federal Reserve to cut interest rates three times in 2019. That said, the U.S. economy is nearing full employment, meaning almost everyone willing and able to work can.
What it means for you: It's generally been a good year for workers, and economists expect that full employment could result in wage increases. For people looking to switch jobs, this monthly report can also be informative because it shows which industries are hiring the most.
Because hiring is one of the most-watched economic indicators on Wall Street, any surprises can result in short-term swings in the stock market.
What's happening: It's been a tough year for the automobile industry, as global car sales are expected to plummet the most since the Great Recession. In the coming week, traders will monitor a report on vehicle sales in November to see if Black Friday sales lured buyers. Economists currently project sales picked up from October, though monthly gains have averaged the lowest amount since 2014.
Why it matters: In cutting interest rates, the Fed hoped to encourage borrowing among consumers and businesses, such as taking out a loan to buy a new vehicle. That hasn't really materialized yet, but with 2020 models already on lots, consumers may find discounts heading into the end of the year. That said, even with more attractive financing, the cost of owning a car has also gone up.
What it means for you: If you're in the market for a new car, now may be a good time to get a deal. Even if you're not, what your neighbors do matters to the overall economy.
Motor vehicles and parts made up about 4% of gross domestic product (GDP) in 2018, and overall consumer spending accounts for more than two-thirds of U.S. economic growth. Wall Street will be particularly focused on consumers now that the all-important holiday shopping season here.
The upcoming week marks the beginning of December, which historically has been tied for the second-best month of the year for the S&P 500, according to data compiled by Yardeni Research.
What's more, the stock market is poised to end one of its best decades ever with a bang. The Dow Jones Industrial Average is up nearly 20% this year. A $500 investment in the Dow 10 years ago would be worth about $1,700 today.
That said, experts do anticipate some bumpiness in the weeks ahead, particularly related to the next steps with a potential U.S.-China trade deal. And the 2020 election, which is less than a year away, could also cause some uncertainty.
Any turbulence in the market can be a good opportunity for long-term investors to buy stocks at lower prices. And no matter what happens in any given week, it's important to keep perspective and remain consistent with your investment strategy.
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