Major U.S. benchmarks slid on Monday amid declines in the health and consumer sectors as investors keep a keen eye for news from the Federal Reserve regarding a change in the current interest rate policies. The Dow Jones industrial average declined 73.29 points, or 0.41%, to trade at 17,725.2, the S&P 500 fell 9.25 points, or 0.44%, to trade at 2,080.86 and the Nasdaq Composite shed 18.86 points, or 0.37%, to close Monday’s trading session at 5,108.67. Regardless of Monday’s declines, the three major indexes managed a second consecutive month of gains, mostly lifted by the financial sector, which has risen by 1.7%. Monday’s decliners included retailer shares. The S&P’s retail index has fallen by 1% as the recent holiday shopping figures withdrew when compared to the previous year. The decliners included Wal-Mart (N:WMT) and Macy`s Inc (N:M) with a 1.8% and 2.3% decline, respectively. Federal Reserve Chair Janet Yellen is scheduled to address Congress on Thursday and give a speech on the economic outlook ahead of Friday’s nonfarm payrolls report. According to Fed officials, employment is one of the key factors in determining the right time for an interest rate, making Friday’s report paramount. While the U.S. central bank is poised to raise interest rates next month for the first time in a decade, the European Central Bank is expected to further expand its current monetary easing measures on Thursday. Friday's non-farm payrolls report could provide some insight into the policies that may be unveiled on the Fed's meeting on December 16th.
Gold has suffered one of its worst months in nearly two and a half years. The price of gold has fallen 7.5% in November alone, raising concerns over its price in the Federal Reserve moves forward with an interest rate hike next month. These concerns have already weighed down on the yellow metal, bringing the price down to $1,052.46 – its lowest in six years. Higher interest rates tend to weaken gold due to their stabilizing effect on inflation. So far, this year has proven to be hard on gold investors. It has declines 11% since the beginning of 2015 and is on track for further declines once the Federal Reserve moves forward with raising U.S. borrowing costs.
This week’s major economic data releases continue with the release of Chinese manufacturing data early on Tuesday, followed by Canadian GDP and U.S. manufacturing data later in the day. Australian GDP and U.S. employment data will be released on Wednesday, while the European Central Bank is scheduled to make its interest rate decision on Thursday, followed by U.S. non-manufacturing PMI. The week will conclude with the U.S. nonfarm payrolls report, which holds special significance due to the Federal Reserve’s statements regarding a data-dependent interest rate hike in December.