Last Updated: 4:36 PM EST
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Stock indices finished today’s trading session in the red. The Nasdaq 100 (NDX), the S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) fell 1.57%, 1.54%, and 1.63%, respectively. This was the result of nonfarm payrolls surging by 256K in December, surpassing the expected 157K, with health care, government, and social assistance leading job gains, according to the Bureau of Labor Statistics.
At the same time, November’s payrolls were revised down to 212K from 227K. Economist Robert Frick noted that post-hurricane recovery contributed significantly, while retail job increases were largely seasonal. Despite the strong December report, job growth for 2024 slowed down overall to an average of 186K per month compared to 251K in 2023.
Interestingly, the unemployment rate dipped to 4.1%, slightly below the expected 4.2%. In addition, average hourly earnings grew 0.3% month-over-month, in line with estimates but below November’s 0.4% rise. On a year-over-year basis, wages increased by 3.9%. Fitch Ratings’ Brian Coulton stated that the data does not indicate renewed labor market tightening, which may reassure the Federal Reserve amid inflation concerns.
Furthermore, health care added 46K jobs, while the government gained 33K, and retail rebounded with 43K after a decline in November. However, Renaissance Macro Research sees real estate jobs as something to be concerned about due to rising interest rates.
First Published: 3:40 AM EST
U.S. stock futures edged lower on Friday as investors braced for the release of the December Nonfarm Payrolls report. This data point will provide insights into the strength of the labor market and could impact market sentiment. Futures on the Nasdaq 100 (NDX), the Dow Jones Industrial Average (DJIA), and the S&P 500 (SPX) were down 0.31%, 0.01%, and 0.16%, respectively, at 3:27 a.m. EST, January 10.
Economists anticipate 155,000 job additions for December, reflecting a slowdown from an increase of 227,000 jobs in November. Further, concerns remain about the potential impact on the Federal Reserve’s monetary policy. A stronger-than-expected report could strengthen the view that interest rates will remain unchanged, while a weaker report might raise hopes about potential rate cuts.
The market is currently pricing in a low probability of a rate cut at the upcoming Federal Reserve meeting, reflecting concerns about persistent inflation. The recent release of the ISM Services Purchasing Managers’ Index (PMI) triggered these concerns, as the report indicated higher price levels.
Meanwhile, wildfires in the Los Angeles area, including the destructive Palisades Fire, have also impacted market sentiment. Shares of utility company Edison International (EIX) were down due to concerns about potential liabilities related to the wildfires.
The major U.S. stock indices are poised for weekly losses. The S&P 500 and the Nasdaq Composite are down 0.4% and 0.7%, respectively, so far this week. Also, the Dow Jones declined 0.2% in the said period.
On the corporate front, investors will be closely monitoring earnings reports from companies such as Constellation Brands (STZ), Delta Air Lines (DAL), Tilray (TLRY), and Walgreens Boots Alliance (WBA).
At the time of writing, the U.S. 10-year treasury yield was up, floating near 4.69%. Simultaneously, WTI crude oil futures are trending higher, hovering near $74.50 per barrel as of the last check.
Elsewhere, European indices opened lower on Friday morning as investors closely watched the U.K. debt market, where yields on certain gilts (British government bonds) hit their highest levels in decades.
Asia-Pacific Markets Ended Lower on Friday
Asia-Pacific indices were in the red today as traders assessed several economic data points from Japan and reports from China that its central bank would suspend treasury bond purchases.
At the same time, Hong Kong’s Hang Seng Index was down 0.92%. Further, China’s Shanghai Composite and Shenzhen Component indices declined by 1.33% and 1.8%, respectively. Also, Japan’s Topix and Nikkei indices fell 1.05% and 0.8%, respectively.
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