Mourning for Jimmy Carter casts a shadow over the US stock market this week

Trading hours are scheduled to be shortened this week on the occasion of the Day of Mourning, which falls on Thursday, to say goodbye to the death of former US President Jimmy Carter, in addition to some bond markets closing earlier, according to what the American Investopedia platform reported.

Important American data

Next Friday, investors are awaiting the release of the US jobs report for December, with private sector employment data released earlier.
On Wednesday, minutes from the December FOMC meeting will highlight officials’ deliberations on interest rates.
Among the speakers will be Federal Reserve Governors Christopher Waller and Michael Bowman, along with Philadelphia Fed President Patrick Harker and Kansas City Fed President Jeffrey Schmid.
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The services sector PMI is also scheduled for December while the Federal Reserve is scheduled to release consumer credit data on Wednesday.
The US trade deficit data and preliminary consumer confidence survey results for December will also be released this week.
On Friday, market watchers will watch December’s jobs numbers, which come after employers added 227,000 jobs in the previous month, exceeding economists’ expectations. However, the unemployment rate also rose during the month.

The decision to cut rates in January

After cutting interest rates at three consecutive meetings, Fed officials will closely examine jobs data for signs of fundamental weakness in the labor market.
The jobs report coupled with deteriorating inflation data could give officials a tough decision on whether to cut interest rates again when the Federal Reserve meets in late January.
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Airlines profits

Delta Air Lines will also issue its quarterly earnings report this week, along with Jefferies Financial, Albert Saunce, and others.
Delta will announce its quarterly earnings on Friday after a disappointing quarter due to a global IT outage that resulted in costs of about $500 million.
However, the airline said it expects an increase in travel by premium customers in 2025.

Stock markets rise

The stock market has seen a significant rally over the past two years with every major market index hitting new highs in 2024.
In fact, in early December, the S&P 500, Nasdaq Composite, and Dow Jones closed at new highs, driven by comments from Federal Reserve Chairman Jerome Powell, who indicated that the US economy was in “good shape.”

Trend of US stock indices

But since that peak about a month ago, the stock market has suffered as all three major market indexes slid into the red.
This represents a worrying trend for investors, as history suggests that tough times may be coming.
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Although the market experienced difficulties heading into late December, investors usually hope for a break thanks to the Santa Claus rally that occurs during the last five days of December and the first two days of January.

Santa Claus height

The term was first coined by Yale Hirsch in 1972. LPL Financial analysts say they found, reviewing data dating back to 1950, that during a seven-day trading period in late December, the S&P 500 rose about 1.4%. On average, the trade ends up about 80%.
After rising positively at the time of Santa Claus, the S&P 500 rose 1.4% in January and 10.4% during the year on average.

Difficult days await investors

But on the other hand, the absence of an increase during that period may be a harbinger of difficult days awaiting investors. In years without rising stock prices, the S&P 500 fell in January and annual returns averaged 5%.
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Factors that lead to optimism

Despite these somewhat bearish indicators, there are a number of reasons for optimism.
President-elect Donald Trump has pledged to extend a number of tax cuts passed during his first term that many believe will boost the economy.
The next administration is also expected to reduce regulatory restrictions and create a more business-friendly environment.
The economy is likely to continue boosting corporate profits, pushing the market higher.
The Fed’s campaign to continue lowering interest rates is also expected to boost business spending, further boosting economic growth.