The DC Today - Tuesday, December 5, 2023

Today's Post - https://bahnsen.co/4a8TMWG

As we get ready for a busy week of jobs data a few things stick out:

(1) The weekly jobless claims remain very low which seems to indicate a continued healthy employment market

(2) The “quits” rate (people voluntarily leaving their job) has been very high, and even as it has come down from early 2022 highs, it remains very elevated historically

(3) The number of job openings remains very high (though it fell to 8.7 million this month, still 1.5-2 million higher than pre-COVID average, but well off 2021 highs)

(4) The average work week has steadily declined on the margin (from 35 hours, which was above the 15-year average, to 34.25 hours, which is below the average).

(5) Several data points have softened in recent months, but not softened to what can be called “weak” conditions – just “less strong” than had been the case previously

A few other market tidbits and things that caught my eye today …

It is interesting to me that small cap value has outperformed growth since the turn in the middle of the year, but large cap growth has modestly outperformed large cap value. The two are normally correlated.

Some of the “big seven” names that have driven a lot of the market this year have not moved at all in six months (well, they have moved up and down, but I mean they currently sit flat from where they were this summer). The broader market has begun playing a little catch-up.

2024 earnings expectations are now up to $246/share in the S&P 500. We are likely going to end at $221 for 2023 so this would mean earnings growth of +11.3% in 2024, rather amazing if it happened. Of course, at that earnings level, the S&P is still trading at an 18.6x multiple (forward projected), and is trading currently at 20.7x.

Links mentioned in this episode: TheDCToday.com DividendCafe.com TheBahnsenGroup.com