Markets continued to trade sluggishly early in the week with stocks trading within a narrow range, but by the end of the week, the flattening yield curve and a mild slowdown in the non-manufacturing sector of the economy kept the bulls at bay.
Investors were already expecting a sluggish week as the Fed is expected to hike rates next week, but as the flattening of the Treasury yield curve gained momentum this week with the spread between 5-year and 30-year yields declining to the lowest since November 2007, it further bogged down the equities markets.
Given that the non-farm sector added 190,000 jobs in November, the overall economy seems to be doing fine. However, the non-manufacturing PMI reading slipped to 57.4, which startled the market in the end.
To conclude, we had another week of sideway trading after a spectacular bullish run in the last few weeks, and all key indicators are still indicating further bullish moves. So, stay tuned for more gains in the remaining days of the year.
Be sure to check out our previous week’s edition here, in which improving consumer confidence dominated the news cycle and pushed the Dow to yet another new high.