Yesterday was akin to whistling past the graveyard as the session never got going because there was too much anxiety. The good news is the market didn’t collapse ahead of today’s session, which is chock full of economics and Jay Powell’s speech at the Brookings Institute.The Russell 2000, up +0.31%, was the best-performing large equity index. The S&P 500 saw five sectors higher, with Technology (XLK) bringing up the rear.

Up volume overwhelmed the down volume, still hinting at bets Powell will not slay the market today.

Market Breadth	NYSE	NASDAQ
Advancers	1,823	2,332
Decliners	1,338	2,298
New Highs	46	85
New Lows	68	189
Up Volume	2.53 billion	2.90 billion
Down Volume	985.51 million	1.66 billion

Heat Map

Value stocks continue to dominate growth stocks.

Not all growth is struggling, however, small-cap value is significantly outperforming small-cap growth.  So, small is where the action is for the moment.

Data and Chatter

Lots of economic data out today.

Time	Release	Period	Cons	Prior
8:15	ADP Employment Report	November	200K	239K
8:30	Wholesale Inventories	October (P)		0.60
8:30	GDP	3Q22 (2nd)	2.8%	2.6%
9:45	MNI Chicago PMI	November	47.1	45.2
10:00	JOLTs	October	10.03m	10.07m
1:30	Jay Powell Brookings

Keep an eye on JOLTs. That green line below (openings) needs to move much lower; by the same token, the blue line (quits) needs to move higher.

The Fed discount meeting minutes were intriguing. Nine of 12 regional banks voted for a 75-basis points (bps) hike, but three (Kansas City, New York, and Philadelphia) wanted 50-bps. Perhaps Powell will talk 50-bps today.

Portfolio Approach

We are adding a new position in Energy to our Hotline Model Portfolio.

Today’s Session

The updated GDP saw third quarter growth increase to 2.9% from 2.6%, while the street was looking for 2.7%.  The release took a little air out of the market.

The headline reads better, but final domestic demand was subdued. Business investment is a key highlight, but residential fixed investment, and even consumer spending is worrisome.

It’s doubtful this will alter what Jay Powell planned to say today.

ADP Jobs Report

At 127,000 the ADP jobs report came in significantly below consensus of 200,000.  Moreover, the composition of the report has a number of red flags.  Job leavers getting 15.1% raise versus stayers 7.6%, but apparently fewer folks are leaving.  Remember JOLTS at 10:00am.

Change by Industry

Goods

• Natural resources and mining up 16,000
• Construction down 2,000
• Manufacturing down 100,000

Services

• Trade, transportation, and utilities up 62,000
• Information down 25,000
• Financial activities down 34,000
• Professional and business services down 7,000
• Education and health services up 55,000
• Leisure and hospitality up 224,000
• Other services up 8,000

Manufacturing down 100,000 is jaw dropping.  Conversely, leisure up 224,000 reflects a more active society, but these are the lowest paying jobs in the BLS report.

Buckle Up!

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