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On Wednesday, the S&P 500 Index ($SPX) closed up by +0.30%, the Dow Jones Industrials Index ($DOWI) by +0.86%, and the Nasdaq 100 Index ($IUXX) by +0.20%. This marked a recovery from early losses, achieving three-week highs for the S&P 500 and Nasdaq 100, and a 2.5-week high for the Dow. Key economic indicators contributed to this shift, with the November ADP employment report showing a surprising decrease in jobs by -32,000, the largest drop in over 2.5 years, while the ISM services index unexpectedly rose to 52.6, indicating growth in the service sector.
In the week ending November 28, mortgage applications in the U.S. fell by -1.4%, with a mixed performance in the sub-indexes. The average 30-year fixed rate mortgage decreased from 6.40% to 6.32%. The likelihood of a Fed rate cut at the upcoming December meeting increased significantly, with swaps markets now estimating a 95% chance of a -25 basis point reduction.
Corporate earnings reflect robust performance, with 83% of S&P 500 companies exceeding forecasts in Q3, leading to an average earnings increase of +14.6%, outperforming expectations of +7.2%. Significant gains were seen in the chipmaking sector, notably with Microchip Technology surging by over +12% following strong earnings forecasts.
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