Rise in Interest Rates and Stock Market Opening – Latest News 2024

It has been a red start to the stock market opening in the USA, and once again it was a rise in interest rates that characterized the third trading day in 2024. The interest rate on US government bonds with a ten-year maturity is up to 4.01 per cent, ten basis points higher than on Thursday morning, and 22 basis points higher than Wednesday last week.

In the market, the pricing of the probability of a Fed rate cut in March has fallen by 20 percentage points in one week, to 65 percent.

Cold feet

“Those who have envisioned an early start to the interest rate cuts “over there” are about to get cold feet. Yesterday’s US key figures contributed to the impression of a still solid labor market, in itself an argument that the Fed does not need to rush into cut mode,” writes chief economist Kjersti Haugland in an update from DNB Markets.

Thursday’s macro

On Thursday, new figures from the US Department of Labor showed that 202,000 Americans applied for unemployment benefits for the first time in the week up to and including December 30. In advance, a number of 216,000 was expected, according to Trading Economics. The number of Americans who continue to receive unemployment benefits (continuing claims) was 1,855,000 per 23 December, against the expected 1,883,000.

Earlier on Thursday, new figures from ADP Employer Services showed that 164,000 new jobs were created in the private sector in the US in December, against an expected 115,000.

The world’s most important key figures

“The world’s most important key figure – non-farm payrolls – has, given the cooling feet of market players, great potential to have significant market effects today”, writes Haugland.

If employment growth were to be as DNB Markets expects (an increase of 200,000 or stronger), Haugland believes the rise in interest rates could accelerate further. At the same time, she believes that an outcome below the consensus (174,000) could cause interest rates to recoil downwards. Unemployment is expected to rise to 3.8 percent.

2024-01-05 07:27:02
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