DailyPlay Update – December 8, 2023

Today is the release of the Non-Farm Payrolls figure where analysts’ expectations sit at 180K. Last month saw a downside surprise which had provided a tailwind for equities to rally through November. Another figure below expectations could very well prove to be the catalyst for a continuation of the rally that has slowed down in recent weeks. Next week’s Fed meeting will also be closely followed as Jerome Powell is expected to provide more clues regarding interest rate trajectory. Fed futures are pricing in a 97% probability that rates stay the same next week, which has been largely priced into markets already. Markets are pricing in a rate cut in March 2024, which depending on the data, and next week’s Fed meeting, could be brought forward if the Fed believes inflation is declining better than expected. This will provide an additional boost to equities.

Due to the jobs data being released today and the Fed meeting next week, we will be holding off on adding new positions. The current DailyPlay portfolio is well-balanced with 4 bullish, and 4 bearish setups. While our overall outlook remains bullish as the Fed pivots to a dovish tone, we will wait for additional confirmation from today’s data before entering new positions.