US Employment, CPI, Index Rebalancing Triple Threat to Take Center Stage This Week

December 15th Markets are on high alert this week, as a flurry of delayed economic data releases coincide with a broad market index rebalance—events that could spark volatility. The U.S. will publish the November jobs report and key inflation readings this week, which could either reinforce or push back against the Federal Reserve’s interest rate outlook for 2024. Fed officials cut rates for the third straight time last week, while noting that as rates near neutral levels, they may keep an open door to easing again next year. Also on tap: the U.S. November Consumer Price Index (CPI) report. Economists surveyed by The Wall Street Journal (WSJ) expect the index to rise 3.1% year-over-year. Farzin Azarm, managing director of stock trading at Mizuho Securities USA, says the week’s biggest market event is what he calls “one of the largest annual clearing events.” Specifically, quarterly rebalances for the S&P 500 and Nasdaq 100 will take place Friday, when index providers will adjust the components and weights of their benchmarks to ensure they continue to reflect the markets they track. U.S. stocks posted mixed moves last week. Per FactSet data, the S&P 500 fell 0.6%, the Nasdaq Composite dropped 1.6%, and the Dow Jones Industrial Average gained 1.1%.