Market Lab Report - Premarket Pulse 12/7/15

Published : December 7 2015 at 8:38 ET

Major averages shot higher Friday on lower volume. Markets rallied on the strong jobs report which increased the odds of a rate hike when the Fed meets on December 16. After a volatile week of trade, the major averages closed roughly flat for the week. Thursday's shakeout could help to set up a year-end rally as the market expects a Fed rate increase which is viewed as constructive.

CME FedWatch puts the odds of a hike now at 79%. Should the Fed hike rates, the odds of a hike of 25 / 50 basis points stand at 21% / 79%, respectively. Indeed, rates at the low end of the yield curve have been moving higher by almost 50 basis points in anticipation of impending rate hikes.

OPEC increased its production quota which sent oil back under $40. A basket of other commodities as represented by the Commodity Research Bureau Index is in danger of hitting lows not seen since the early 1970s. The global economy remains stagnant.

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