Traders Eye Jobs Report After Exceptional End to 2023
2024.01.03 02:21
An exceptional end to the year has left markets with a lot to live up to in 2024, with huge rate cuts and a soft landing now among the things investors have priced in.
The fantasy scenario for central bankers across the globe over the last couple of years is now a very real possibility but it’s also far from guaranteed, despite how markets are now positioned. With so much now to live up to, investors may start asking themselves whether evaluations have become a little stretched.
Everyone will naturally look to read too much into the first trading session of the year, even the week as a whole, but after an unusually strong end to the year that’s probably not the best idea. If markets slightly pare gains in the first quarter I don’t think that necessarily spells trouble for the year, especially if we see a couple of hiccups in the data.
We’ve been spoiled over the last couple of months and while that may continue and see investors price in even more rate cuts this year on the belief central banks have overdone it, it may also not be so kind.
The first test of the new year is the jobs report on Friday and it will be interesting to see how traders respond if we’re given another promising batch of data.
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