Last week, we saw the continued apathy/hatred for all things techland- and biotech-related while the markets showered the financial sectors and the oil patch with necklaces of gold and diamonds. Despite the dichotomy in the markets, we continued to see the indices making new highs pretty much all last week.
Personally, I think techland returns to favor pretty soon, and once the turn comes the rise in share prices in the sector could be equally vicious on the positive side.
Last week, we also had an agreement between the OPEC gang (members) on production cuts, which led to the aforementioned love for all things black-gold-related, although I think, sooner rather than later, you will have member nations cheating and reneging on the deal.
After yesterday's jobs number, there is very little ambiguity left regarding the Federal Open Market Committee decision on interest rates come Dec. 14, which will be the last day of the last meeting for the Fed for 2016.
The Fed will raise interest rates by 25 basis points.
Let's hope they don't start off by right away digging themselves a deep hole for 2017, with no wiggle room like they have the last couple of years, by talking about their plans for the coming year. The best they could do is raise and then say they are back to being data-dependent and watching global events unfold.
After all, British Prime Minister Theresa May seems to be in for a tough haul as far as invoking Article 50 to begin the separation process from the European Union. Already there has been back-and-forth between officials at the Bank of England and Mario Draghi, boss of the European Central Bank. Throw in the Italian referendum this weekend and you have yet another potential mess that could get a lot worse in a heartbeat, and let's hope the Fed is watchful this time around (unlike it's asinine rate hike last December).
In addition, the economic recovery in China and Japan is far from on track, and throw in the demonetization in India (86% of the currency that was in use was removed from circulation and made illegal literally overnight) and things in Asia aren't exactly hopping economically either.
Yes, here at home, President-elect Trump plans to throw a ton of cash on infrastructure spending and other measures, so maybe there is some hope, economically speaking. However, what the he plans to do and actually ends up doing remain to be seen, although since the elections he seems to have made mostly the right moves.
On the inflation front, this jobs number yesterday was a bit of a disappointment, with wage growth declining by 0.1%, putting paid to inflationary pressures at least for now.
On to the week ahead. At 8:30 a.m. ET Monday, we will hear from New York Fed President William Dudley. At 9:25 a.m., Chicago Fed boss Charles Evans will regale us with his pearls of wisdom, and finally at 2:05 p.m. James Bullard, St. Louis Fed head honcho, will dazzle us with his economic brilliance. After those three on Monday, the Fed will go into "quiet mode" until after the FOMC meeting the following week.
In addition, to the usual reams of economic data both here and abroad, we still have a few techland earnings to contend with next week. Thankfully, it will be only on Thursday, when Ciena (CIEN) will report its earnings before the opening bell. After the closing bell, Broadcom (AVGO) and Finisar (FNSR) will report their earnings. That is not to say there aren't any non-techland companies reporting next week, but techland is my playground and thus that is where my focus lies.
On the lighter side:
Economists are people who are too smart for their own good and not smart enough for anyone else's.
With that, I wish each and every one of you a safe and joyful weekend with your loved ones.
Can we say 11 in a row?