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“Find a job you enjoy doing, and you will never have to work a day in your life.” – Mark Twain

There’s a modestly positive bias to futures this morning, but the release of the December jobs report could shake things up considerably.  Like last month’s report, the data was mixed.  Non-Farm Payrolls came in considerably below forecasts at 199K versus expectations for a reading closer to 500K.  At the same time, the Unemployment Rate actually dropped below 4% for the first time in the post-COVID era.  Average Hourly Earnings grew 0.6% m/m which was better than expectations for growth of 0.4% while average weekly hours were slightly lower than estimated. Despite the stronger than expected wage growth, on a y/y basis, earnings rose 4.7%, but that’s still more than two full percentage points below the y/y rate of CPI.

Read today’s Morning Lineup for a recap of all the major market news and events from around the world, including the latest US and international COVID trends.

The trading year is only four trading days old, but already we have seen lots of moves, and they’ve primarily been to the downside.  Heading into the weekend, we wanted to provide a quick look at where each of the new major indices stand on a longer-term basis.

Starting with small caps, the Russell 2000 (IWM) broke out to new highs in November, but quickly reversed and has since broken below both its 50 and 200-day moving averages (DMA).  Since then, the Russell has made several attempts to trade back above those averages, and while it has traded above the 200-DMA multiple times, the 50-DMA has been a more formidable barrier that has yet to break.

The Nasdaq 100 (QQQ) has been the weakest of the three major indices this year with a decline of over 3%, but at this point, it has been able to hold support at the prior highs from September.  This more recent decline is the third time QQQ has tested support since the start of December, and while it has held so far, the more often an index tests support or resistance, the weaker it often becomes.

Lastly, the picture for the S&P 500 (SPY) probably looks the best of the three.  Not only have the uptrend since the September lows and the 50-DMA held to this point, but the prior highs from mid-November and mid-December have also acted as support.  As long as these levels hold, it should provide some comfort to chart watchers.

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