December’s US nonfarm payrolls report showed that growth in average hourly wages and job growth slowed, which should pave the way for the Federal Reserve (Fed) to slow the pace of rate hikes of interest and alleviate the concerns of the market. open higher.
before the deadline,Dow Jones Industrial Averagerose more than 120 points or nearly 0.4%,Nasdaq Composite Indexfell nearly 30 points or nearly 0.3%,S&P 500 indexup nearly 0.2%,Semiconductor PhiladelphiaThe index rose more than 0.2%.
The U.S. Department of Labor announced on Friday that the number of nonfarm payrolls in December of last year was 223,000, which was higher than market expectations of 200,000, but lower than the previous revised value of 256,000. The unemployment rate for the month was 3.5%, below market expectations 3.7%, the previous value was revised downwards to 3.6%. In addition, the growth rate of average hourly earnings slowed last month, below market expectations.
After the publication of the report,S&P 500 indexFutures andNasdaq All 100 index futures rose more than 1%, mainly as signs of wage cooling outpaced the performance of the number of employed persons which exceeded market expectations. Meanwhile, US Treasury yields declined, with the rate-sensitive two-year yield standing at around 4.4%.dollar indexgo lower.
While a weakening job market is a Federal Reserve goal, the Fed is particularly concerned that wage pressures dampen its efforts to cool inflation, and the latest report that wages are slowing is a welcome one for the market and the Fed will follow closely.
Prior to the release of today’s nonfarm report, the ADP report, known as ‘small nonfarm’, showed that the number of people employed far exceeded expectations, while the number of people receiving unemployment benefits fell unexpectedly early last week. The US labor market remains resilient despite Fed rate hikes.
After Atlanta Federal Reserve Bank President Raphael Bostic recently said the central bank “still has a lot of work to do” to contain inflation, the market is pricing in an interest rate hike of more than 5% in June .
It is worth noting that Fed “Eagle King” Bullard (James Bullard) unexpectedly released doves. He said interest rates are approaching a sufficiently tight range and inflation expectations have declined. Those words brought optimism to investors, but Bullard is no longer a voter this year on the Federal Open Market Committee (FOMC).
Also, Esther George, president of the Federal Reserve Bank of Kansas, which has voting rights at the FOMC this year, said she hopes the Fed will continue to work hard to reduce its balance sheet for some time. He believes the Fed should raise the key interest rate above 5% and hold it through 2024 until inflation shows signs of starting to fall back towards the Fed’s 2% inflation target. George is seen as one of the more aggressive members of the FOMC.
Starting at 22:00 on Friday (6) Taipei time:
Focus on actions:
bed bath and beyond(BBBY-US) fell 22.49% in early trading to $1.31 a share
Shares of US home furnishings retailer Bed Bath & Beyond fell more than 12% in premarket trading after management said it was considering filing for bankruptcy due to a lack of liquidity. Wall Street investment bank KeyBanc lowered its stock price target from $2 a share to $0.1 a share, citing concerns about the company’s bankruptcy and weak fundamentals.
Lululemon(LULU-US) rose 1.91% to $332.17 a share in early trading
Shares of sportswear brand Lululemon rose nearly 2% in premarket trading after Wells Fargo uprated the stock to “overweight” from “equal weight,” citing Lululemon’s momentum.
Tesla (ATS-US) fell 7.67% in early trading to $101.88 per share
Shares of US electric-car leader Tesla fell more than 6% ahead of market after the company cut prices for Model 3 and Model Y in China, a move that raised expectations of a price war for the vehicles electric cars in the world’s largest auto market as Chinese demand weakened.
Today’s key economic data:
- US Nonfarm Jobs Reported 223,000 in December, 200,000 Expected, 256,000 Previously Revised
- US Unemployment Rate Reported at 3.5% in December, 3.7% Expected, 3.6% Previously
- Average weekly working hours in the US in December was 34.3 hours, expected 34.4 hours, previous value was 34.4 hours
- Average hourly wages in the US increased 4.6% in December, versus 5.0% expected and 4.8% prior
- Average hourly wages in the US increased 0.3% in December, versus 0.4% expected and 0.4% previously
- December US Labor Force Participation Rate Reported 62.3%, Expected 62.2%, Previous Value 62.2%
- November Revised Monthly US Durable Goods Orders Rate Expected – 2.1%, Previous Value – 2.1%
- Monthly rate of US factory orders in November is expected to be -0.8%, the previous value was 1%
- The ISM non-manufacturing index in the United States is expected to be 55 in December and the previous value is 56.5
Wall Street Analysis:
Brent Donnelly, president of Spectra Markets, said the nonfarm report revealed signs of a soft landing for the US economy and that the economy is solid and overheating is not that much of a concern.
According to the latest research from JP Morgan Chase, nearly two-thirds of US small and medium-sized businesses expect the economy to fall into a recession. After the Fed battled high inflation for several months, rising operating costs have become the most worrying issue for US companies. According to the survey, 65% of midsize businesses and 61% of small businesses in the US expect a recession this year, and most small business leaders said they expect the upward trend in operating costs continue.
UBS analysts estimate itS&P 500 indexIt will be sold in the second quarter of this year. Analysts wrote in the report that UBS economists expect the US economy to decline from the second quarter to the fourth quarter of 2023. A race amid impending shocks.
