- Brian Turner
- 05 Jan, 2024
- New York City
Nonfarm payrolls expanded by 216,000 in December, the U.S. Bureau of Labor Statistics reported Friday.
Economists polled by Ticker.com estimated payroll expansion by 160,000 after the economy added a downwardly revised 173,000 jobs in November.
However, the jobless rate was unchanged at 3.7%.
For the year 2023, the U.S. economy added 2.7 million jobs, the smallest increase since 2019 excluding pandemic-impacted 2020, an average monthly increase of 225,000.
Governments at all levels expanded jobs by 52,000, followed by gains in leisure and hospitality of 40,000, healthcare by 38,000, social assistance by 21,000, and construction by 17,000.
Employment in the leisure and hospitality sectors rose by 39,000 a month, following a monthly increase of 88,000 in 2022, but is still lagging the pre-pandemic peak in February 2020 by 163,000.
Employment in transportation and warehousing declined by 23,000 in December, and employment in the sector has declined by 100,000 after peaking in November 2022.
In December, average hourly earnings for all employees on private nonfarm payrolls increased by 0.4%, or 15 cents, to $34.27 and gained 4.1% over the last twelve months.
The change in total nonfarm payroll employment for October was revised down by 45,000 to 105,000, and in November it was revised lower by 26,000 to 173,000.
- Barry Adams
- 05 Jan, 2024
- New York City
Stocks on Wall Street were volatile after investors reviewed the latest update on the job market.
The U.S. economy added more-than-expected jobs in December, quashing all hopes of a rate cut at the end of the policy meeting in March.
The faster-than-expected expansion lifted the yield on 10-year Treasury notes above 4% after investors dialed back on the prospects of rate cuts in March.
The S&P 500 index and the Nasdaq Composite have been rallying for the last nine weeks in a row, supported by moderate economic growth, weakening inflation, and a resilient labor market.
The latest update on the job market was the third report this week, confirming healthy labor market conditions.
For the week, two widely followed market indexes are expected to close down, halting the rally in the last two months.
U.S. Payrolls Expanded at Faster Pace In December
Nonfarm payrolls expanded by 216,000 in December, the U.S. Bureau of Labor Statistics reported Friday.
Economists polled by Ticker.com estimated payroll expansion by 160,000 after the economy added a downwardly revised 173,000 jobs in November.
However, the jobless rate was unchanged at 3.7%.
For the year 2023, the U.S. economy added 2.7 million jobs, the smallest increase since 2019 excluding pandemic-impacted 2020, an average monthly increase of 225,000.
Governments at all levels expanded jobs by 52,000, followed by gains in leisure and hospitality of 40,000, healthcare by 38,000, social assistance by 21,000, and construction by 17,000.
Employment in the leisure and hospitality sectors rose by 39,000 a month, following a monthly increase of 88,000 in 2022, but is still lagging the pre-pandemic peak in February 2020 by 163,000.
Employment in transportation and warehousing declined by 23,000 in December, and employment in the sector has declined by 100,000 after peaking in November 2022.
In December, average hourly earnings for all employees on private nonfarm payrolls increased by 0.4%, or 15 cents, to $34.27 and gained 4.1% over the last twelve months.
The change in total nonfarm payroll employment for October was revised down by 45,000 to 105,000, and in November it was revised lower by 26,000 to 173,000.
U.S. Indexes and Yields
The S&P 500 index increased 0.5% to 4,715.11, and the Nasdaq Composite increased 0.7% to 14,605.61.
The yield on 2-year Treasury notes increased to 4.43%, 10-year Treasury notes inched higher to 4.04%, and 30-year Treasury bonds rose to 4.19%.
WTI crude oil increased $1.05 to $73.25 a barrel, and natural gas prices decreased 9 cents to $2.72 a thermal unit.
Gold increased $1.91 to $2,045.10 an ounce, and the yellow metal price traded volatile for the fourth day after investors dialed back rate-cut optimism.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 102.47.
U.S. Stock Movers
Costco Wholesale Corporation rose 1.5% to $658.51 after the company reported a surge in sales in December, when the calendar shift added one extra shopping day in the month.
December sales rose 9.9% to $26.15 billion, and total and comparable sales were positively impacted by 3 percentage points for the additional shopping day in the month.
- Inga Muller
- 05 Jan, 2024
- Frankfurt
Stock markets in Europe declined after rallying in previous eight weeks in a row as investors dialed back rate-cuts expectations in early 2024.
The DAX index decreased 0.8% to 16,492.03, the CAC-40 index fell 1.1% to 7,369.63, and the FTSE 100 index inched lower by 0.9% to 7,655.02.
The yield on 10-year German bonds decreased to 2.16%; French bonds inched higher to 2.70%; the UK gilts edged up to 3.79%; and Italian bonds advanced to 3.85%.
Revolution Bars Group plunged 21.7% to 4.26 pence after the company said it would close its facilities located in Derby, Reading, St Peters, Liverpool, and Wilmslow.
Endeavour Mining declined 11.3% to 1,503.0 pence after the company removed chief executive Sebastien de Montessus with immediate effect.
The company said its board is investigating misappropriation of $5.9 million and allegations of personal misconduct with colleagues.
The Board has appointed Ian Cockerill, Deputy Chairman of the Board, as Chief Executive Officer and Executive Director with immediate effect.
Clarkson PLC increased 7% to 3,495.10 pence after the integrated shipping service provider said full-year pre-tax earnings are likely to be ahead of market expectations.
Sodexo SA decreased 0.3% to €101.95 after the French food and facilities management company said fiscal first-quarter sales increased 3.1% and the company reiterated its outlook for fiscal 2024 and 2025.
- Bridgette Randall
- 05 Jan, 2024
- Frankfurt
European markets struggled and extended weekly losses after rising for eight weeks in a row.
Worries about the rate path, lackluster economic data, and stretched consumer finances dominated market sentiment in Friday's trading.
Benchmark indexes in Frankfurt are set to close down 1.7%, in Paris by 2.7%, and in London by 0.9%.
Market indexes have struggled to hold ground in the new year after rising steadily in the previous two months on growing optimism that the major central banks are ready to cut interest rates in early 2024.
That sentiment was reversed in the first week of trading in the new year, after the release of the Federal Reserve's December meeting minutes.
Moreover, reports suggested the resilience of the U.S. labor market after weekly jobless claims declined and the private sector added more-than-expected jobs in December, further denting the enthusiasm for rate cuts.
Eurozone Inflation Accelerated In December
The eurozone inflation rate accelerated to 2.9% from a year ago in December, Eurostat reported Friday.
The inflation picked up from 2.4% in the previous month, when it dropped to a two-year low because of the base effect.
Core inflation, which excludes food and energy prices, eased to 3.4% from 3.6% and dropped to the lowest level since March 2022.
Germany's Retail Sales Declined In December
Seasonally adjusted retail sales in Germany declined 2.4% from a year ago in December, the Federal Statistics Office, or Destatis, reported Friday.
Retail sales declined 2.5% from the previous month and fell the most since April 2022, reversing the 1.1% increase in October.
Sales of non-food items adjusted for inflation declined by 3.6%, and online and direct sales eased by 2.8%.
In contrast, the real retail trade in textiles, clothing, shoes, and leather goods increased by 2.0% compared to the previous month and by 2.6% compared to the same month last year.
The effect of higher prices was evident in food retail sales, and food sales dropped steadily in 2023 and fell to the level last seen in 2015 as consumers focused on the basics and avoided fancy items.
Real food retail sales declined 0.5% in the month and dropped 0.1% unadjusted for price.
Sales declined 3.3% in the first eleven months.
UK Home Prices Rebounded In December
UK home prices rebounded after seven months of decline as buyers searched for bargains and tackled elevated mortgage rates.
The price increase still reflected the home shortages rather than the growing demand from buyers.
The Halifax House Price Index increased by 1.7%, or £4,800, from a year ago in December, Halifax and the Bank of Scotland said in a report released Friday.
On a monthly basis, home prices rose 1.1% from the previous month and increased for the third month in a row.
The average home price increased by 1.1%, or £3,060, from the previous month to £287,105.
Across the UK in 2023, Northern Ireland recorded the largest price increase of 4.1% to £192,153. Scotland with 2.6% to £205,170.
However, the average home prices in the South East fell sharply by 4.5%, or £17,755 to £376,804.
Europe Indexes and Yields
The DAX index decreased 0.8% to 16,492.03, the CAC-40 index fell 1.1% to 7,369.63, and the FTSE 100 index inched lower by 0.9% to 7,655.02.
The yield on 10-year German bonds decreased to 2.16%; French bonds inched higher to 2.70%; the UK gilts edged up to 3.79%; and Italian bonds advanced to 3.85%.
The euro edged lower to $1.090, the British pound inched lower to $1.265, and the U.S. dollar eased to 85.35 Swiss cents.
Brent crude increased $0.54 to $78.15 a barrel, and the Dutch TTF natural gas increased by €0.50 to €33.91 per MWh.
Europe Stock Movers
Revolution Bars Group plunged 21.7% to 4.26 pence after the company said it would close its facilities located in Derby, Reading, St Peters, Liverpool, and Wilmslow.
Endeavour Mining declined 11.3% to 1,503.0 pence after the company removed chief executive Sebastien de Montessus with immediate effect.
The company said its board is investigating misappropriation of $5.9 million and allegations of personal misconduct with colleagues.
The Board has appointed Ian Cockerill, Deputy Chairman of the Board, as Chief Executive Officer and Executive Director with immediate effect.
Clarkson PLC increased 7% to 3,495.10 pence after the integrated shipping service provider said full-year pre-tax earnings are likely to be ahead of market expectations.
Sodexo SA decreased 0.3% to €101.95 after the French food and facilities management company said fiscal first-quarter sales increased 3.1% and the company reiterated its outlook for fiscal 2024 and 2025.
- Arun Goswami
- 05 Jan, 2024
- Mumbai
Dalal Street stocks advanced and trimmed weekly losses after a week of choppy trading.
Investors remained optimistic about economic growth and corporate earnings growth in the December quarter.
The Sensex index increased 123.42 points to 72,051.36, and the Nifty index gained 53.75 points to 21,708.25.
On the Mumbai stock exchange, 412 stocks traded at their 52-week highs and 4 stocks traded at their 52-week lows.
Oil marketing companies were in focus, and the companies offered a higher price for ethanol produced from corn.
Oil companies raised the price by ₹5.79 to ₹71.86 per liter for the supply of ethanol for the new fiscal year that started in November.
HPCL increased 1.4% to ₹421.70, and BPCL advanced 0.8% to ₹456.30.
Dabur India added 0.4% to ₹567.75, and the company reiterated December quarter revenue growth in the "mid- to high single-digit."
The company attributed weak growth to lagging demand growth in rural markets and a subdued price increase for its products.
The consumer products company said gross margins are likely to expand, led by moderating inflation and cost-savings initiatives.
Sobha declined 1.1% to ₹1,280.25 after the real estate developer reported record sales in the December quarter of ₹1,952 crore.
The company also launched two new property development projects in the quarter, with a total saleable area of 3.84 million square feet.
Nestle India declined 1.9% to ₹2,660.10, and the company traded ex-split for the first time.
The company announced a 10-to-1 stock split effective January 5 to increase the participation of retail investors and liquidity.
Foreign institutional investors lowered their stake in the company to 12.1% from 12.38%, and domestic institutional investors increased their stake to 9.32 from 9.05 in the June quarter, respectively.
Grasim Industries increased 0.3% to ₹2,077.0 after the company announced a secondary offering to raise as much as 4,000 crore.
The company set the offering price at ₹1,812 per share, about a 12% discount from the current market price.
Jammu &Kashmir Bank gained 1.6% to ₹130.95 after the bank reported total deposits in the December quarter increased 9% from a year ago to 1.29 lakh crore.
Utkarsh Small Finance Bank jumped 1% to ₹58.15 after the company said gross loans issued increased by 31% in the December quarter.
Macrotech Developers gained 0.9% to ₹1,106.10 after the company said sales in the December quarter increased 12% to 3,410 crore from 3,040 crore a year ago.
- Arjun Pandit
- 05 Jan, 2024
- Mumbai
Stocks in Mumbai advanced on the final trading day of the first week in 2024.
The Nifty and the Sensex indexes edged up more than 0.2% in early trading amid muted gains in overnight trading in New York and mixed trading in Asian markets.
Market indexes in Asia traded mixed, and the indexes in Shanghai and Hong Kong traded down.
The Hang Seng index is set to close down more than 2.5% and the CSI 300 index by 1.7%.
Stocks in China have been under pressure this week after an official survey showed manufacturing activities contracted for the third month in a row in December and home sales declines deepened at the nation's top 100 home builders in the month.
In Tokyo, stocks edged up slightly and are set to close higher in the holiday-shortened week.
Market indexes in Seoul and Sydney were nearly unchanged in Friday's trading, and they are set to close down about 1.4% in the week.
India Indexes and Yields
The Sensex index increased 123.42 points to 72,051.36, and the Nifty index gained 53.75 points to 21,708.25.
On the Mumbai stock exchange, 412 stocks traded at their 52-week highs and 4 stocks traded at their 52-week lows.
The yield on the 10-year Indian government bonds held firm at 7.22%, and the Indian rupee hovered near ₹83.23 against the U.S. dollar.
The gold price increased by 0.01% to ₹62,674 per ten grams, and silver rose by 0.3% to ₹72,500 per kilo.
Crude oil increased by 0.4% to ₹6,055 per barrel, and natural gas declined by 1.6% to ₹232.10 per thermal unit.
India Stock Movers
Oil marketing companies were in focus, and the companies offered a higher price for ethanol produced from corn.
Oil companies raised the price by ₹5.79 to ₹71.86 per liter for the supply of ethanol for the new fiscal year that started in November.
HPCL increased 1.4% to ₹421.70, and BPCL advanced 0.8% to ₹456.30.
Dabur India added 0.4% to ₹567.75, and the company reiterated December quarter revenue growth in the "mid- to high single-digit."
The company attributed weak growth to lagging demand growth in rural markets and a subdued price increase for its products.
The consumer products company said gross margins are likely to expand, led by moderating inflation and cost-savings initiatives.
Sobha declined 1.1% to ₹1,280.25 after the real estate developer reported record sales in the December quarter of ₹1,952 crore.
The company also launched two new property development projects in the quarter, with a total saleable area of 3.84 million square feet.
Nestle India declined 1.9% to ₹2,660.10, and the company traded ex-split for the first time.
The company announced a 10-to-1 stock split effective January 5 to increase the participation of retail investors and liquidity.
Foreign institutional investors lowered their stake in the company to 12.1% from 12.38%, and domestic institutional investors increased their stake to 9.32 from 9.05 in the June quarter, respectively.
Grasim Industries increased 0.3% to ₹2,077.0 after the company announced a secondary offering to raise as much as 4,000 crore.
The company set the offering price at ₹1,812 per share, about a 12% discount from the current market price.
Jammu &Kashmir Bank gained 1.6% to ₹130.95 after the bank reported total deposits in the December quarter increased 9% from a year ago to 1.29 lakh crore.
Utkarsh Small Finance Bank jumped 1% to ₹58.15 after the company said gross loans issued increased by 31% in the December quarter.
Macrotech Developers gained 0.9% to ₹1,106.10 after the company said sales in the December quarter increased 12% to 3,410 crore from 3,040 crore a year ago.
- Barry Adams
- 04 Jan, 2024
- New York City
Benchmark indexes delivered mixed performance and Treasury yields edged higher after investors recalibrated interest rate outlook.
The S&P 500 index and the Nasdaq Composite lacked direction, and investors debated interest rate paths, economic health, and labor market conditions.
Investors curbed their enthusiasm for rate cuts after the Fed's minutes suggested that policymakers are not in any hurry to lower rates until clear evidence of a sustained decline in inflation emerges.
While policymakers appear to agree that interest rates are near their peak levels in the current tightening cycle, rates could also go higher if the economic data suggest the need.
Investors' enthusiasm about a possible rate cut powered a nine-week rally in the S&P500 index and the Nasdaq Composite, but in the new year, investors are recalibrating the rate path outlook.
Private Sector Expands In December
The private sector added payrolls at a faster-than-expected pace in December, highlighting the resilient U.S. labor market.
Private payrolls in the U.S. increased 164,000 in December, higher than a downwardly revised 101,000 in November, ADP reported Thursday.
The leisure and hospitality sector led the increase with an addition of 59,000, followed by increases in the construction sector by 24,000 and financial services by 18,000.
The closely watched nonfarm payroll data from the U.S. Labor Department is scheduled to be released on Friday, and economists are looking for the economy to add at least 160,000, according to a survey conducted by Ticker.com, following the increase of 199,000 in November.
Initial Weekly Jobless Claims Declined
The latest weekly jobless claims report showed a decline in layoffs, but labor market conditions remain tight.
Initial jobless claims declined from 18,000 to 202,000 for the week ended December 30, the U.S. Labor Department reported Thursday.
The four-week moving average, which smooths out week-to-week volatility, declined by 4,750 to 207,750.
Continuing claims for the week ending in the previous week eased by 31,000 to 1.855 million.
U.S. Indexes and Yields
The S&P 500 index increased 0.08% to 4,709.35, and the Nasdaq Composite dropped 0.1% to 14,572.40.
The yield on 2-year Treasury notes increased to 4.35%, 10-year Treasury notes inched higher to 3.95%, and 30-year Treasury bonds eased to 4.10%.
WTI crude oil decreased $0.55 to $72.15 a barrel, and natural gas prices increased 15 cents to $2.82 a thermal unit.
Gold increased $2.40 to $2,042.78 an ounce, and the yellow metal price traded volatile for the third day after investors dialed back rate-cut optimism.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 102.32.
U.S. Stock Movers
Walgreens Boots Alliance increased 0.1% to $25.60 after the pharmacy operator reported fiscal first-quarter earnings and revenues that were ahead of market expectations.
Cal-Maine Foods dropped 5.2% to $52.05 after the egg producer reported fiscal second-quarter results.
Revenue plunged in the quarter after the average selling price per dozen fell to $1.70 from $2.70 and the number of dozne eggs sold increased to 288.2 million from 284.0 million, respectively, in the previous year.
Revenue in the quarter dropped to $523.2 million from $801.7 million, net income declined to $16.6 million from $198.3 million, and diluted earnings per share dropped to 35 cents from $4.07 a year ago.
Apple declined 1.2% to $182.0 after an analyst at Piper Sandler lowered his views on the tech giant.
Meta Platforms increased 0.1% to $344.80, and chief executive Mark Zuckerberg sold more than $400 million in the company's share at the end of last year as a part of a trading plan that was previously announced.
Ford Motor Company decreased 0.01% to $11.70, and the company announced a price increase for some of its electric F-150 Lightning pickup trucks.
European Markets Rebounded, Inflation In Germany and France Accelerated
European markets advanced in Thursday's trading, and investors reviewed the latest batch of economic releases.
France's consumer price inflation accelerated to 3.7% in December from 3.5% in the previous month, the statistical agency reported Thursday.
Germany's consumer price inflation rose to 3.7% in December from 3.2% in the previous month, the Federal Statistics Office or destatis reported Thursday.
Core inflation, which excludes volatile food and energy prices, declined to 3.5%, and dropped to the lowest level since July 2022.
The average Inflation rose to 5.9% for the entire 2023, after energy prices declined from the previous year but services inflation stayed elevated.
Spain's private sector activity expanded for the first time in three months in December.
The HCOB Spain Composite PMI increased to 50.4 in December from 49.8 in November, S&P Global reported in its monthly update.
Italy's private sector activity contracted at a softer pace in December, S&P Global reported in a separate report today.
The HCOB Italy Composite PMI increased to 48.6 from 48.1 in November, indicating a contraction in private sector activities for the seventh month in a row.
UK net mortgage approvals increased by 50,067 in November, the Bank of England reported Thursday.
Net mortgage approval rose to a five-month high, but the increase remained muted due to the rising mortgage rates and elevated home prices in the nation.
The effective interest rate, reflecting the mortgage rate paid by the borrower, increased by 9 basis points to 5.34%.
Investors also reviewed the latest minutes of the meeting released by the U.S. Federal Reserve.
Rate-setting committee members appeared to conclude that interest rates are nearing peak rates in the current tightening cycle, but participants were not sure if and when rates would need to be lowered.
Committee members noted that economic growth is moderating, inflation is easing but still remains above the preferred level, and labor market conditions are weakening but still remain tight.
Most participants appeared to support the view that future economic data will provide more insights about the appropriate level of interest rates and whether higher rates are needed in the long term.
Europe Indexes and Yields
The DAX index increased 0.5% to 16,617.29, the CAC-40 index rose 0.5% to 7,450.63, and the FTSE 100 index inched higher by 0.5% to 7,723.07.
The yield on 10-year German bonds decreased to 2.06%; French bonds inched higher to 2.61%; the UK gilts edged up to 3.69%; and Italian bonds advanced to 3.75%.
The euro edged lower to $1.095, the British pound inched lower to $1.272, and the U.S. dollar eased to 84.91 Swiss cents.
Brent crude decreased $0.69 to $77.56 a barrel, and the Dutch TTF natural gas increased by €1.02 to €33.81 per MWh.
Europe Stock Movers
Energy stocks advanced after the crude oil price extended a 3-day gain amid rising tensions in the Middle East and growing violence in the Red Sea lanes, which prompted worries about supply disruptions.
U.S. President Joe Biden warned that the U.S. Navy fleet will attack Houthi installations unless rebels stop attacking merchant cargo ships traveling through Red Sea lanes.
The joint statement included support from the U.S., Japan, the UK, and Germany.
Telefonica SA rose 1% to €3.68 after the Spanish telecom operator signed an agreement with a trade union to lay off up to 3,421 staff.
The company will also take a charge of €1.3 billion linked to its layoff plan.
Nordex SE increased 2.2% to €10.04 after the company said it received an order to supply 106 MW of wind turbines from Spanish electricity producer Capital Energy.
The company did not disclose any financial details related to the order.
Evotec SE dropped 19% to €17.36 after the German biotech company said chief executive Werner Lanthaler stepped down from the office for personal reasons.
Next plc advanced 4.7% to €17.36 pence after the retailer lifted its profit outlook after sales in the pre-Christmas period were ahead of the company's expectations.
JD Sports Fashion PLC plunged 23.7% to 118.35 pence after the specialty retailer lowered its full-year profit estimate.
- Scott Peters
- 04 Jan, 2024
- New York City
Walgreens Boots Alliance increased 0.1% to $25.60 after the pharmacy operator reported fiscal first-quarter earnings and revenues that were ahead of market expectations.
Revenue in the quarter increased by 10%. $36.7 billion from $33.4 billion, net loss attributable to shareholders shrank to $67 million from $3.7 billion, and diluted loss per share declined to 8 cents from $4.431 a year ago.
In the quarter, operating loss improved to $39 million compared to an operating loss of $6.2 billion in the year-ago quarter because of lapping the $6.5 billion pre-tax charge for opioid-related claims and litigation recorded in the year-ago quarter.
Adjusted operating income was $687 million, a decrease of 33% on a constant currency basis reflecting softer U.S. retail market trends, partly offset by improved profitability in the U.S. market and growth in international operations.
The U.S. retail pharmacy segment sales increased 6.4% to $28.9 billion, and comparable sales increased 8.1% from the year-ago quarter, respectively.
Comparable prescriptions filled in the quarter increased 1.3% from the year-ago quarter, while excluding immunizations, they increased 1.8%, impacted by lower market growth due to a weaker flu and respiratory season and Medicaid redeterminations.
Total prescriptions filled in the quarter, including immunizations adjusted to 30-day equivalents, were 311.6 million, steady compared to the quarter a year ago.
The retailer cut the quarterly dividend by 48% to 25 cents from 48 cents a year ago to strengthen its balance sheet and improve its cash position.
The company reiterated its fiscal 2024 adjusted earnings per share estimate of between $3.20 and $3.50.
Cal-Maine Foods dropped 5.2% to $52.05 after the egg producer reported fiscal second-quarter results.
Revenue plunged in the quarter after the average selling price per dozen fell to $1.70 from $2.70 and the number of dozne eggs sold increased to 288.2 million from 284.0 million, respectively, in the previous year.
Revenue in the quarter dropped to $523.2 million from $801.7 million, net income declined to $16.6 million from $198.3 million, and diluted earnings per share dropped to 35 cents from $4.07 a year ago.
Apple declined 1.2% to $182.0 after an analyst at Piper Sandler lowered his views on the tech giant.
Meta Platforms increased 0.1% to $344.80, and chief executive Mark Zuckerberg sold more than $400 million in the company's share at the end of last year as a part of a trading plan that was previously announced.
Ford Motor Company decreased 0.01% to $11.70, and the company announced a price increase for some of its electric F-150 Lightning pickup trucks.
- Barry Adams
- 04 Jan, 2024
- New York City
Stocks struggled to advance in Thursday's trading, and Treasury yields edged slightly higher as investors debated the rate path.
The S&P 500 index and the Nasdaq Composite lacked direction in early trading, and investors debated interest rate paths, economic health, and labor market conditions.
Investors curbed their enthusiasm for rate cuts after the Fed's minutes suggested that policymakers are not in any hurry to lower rates until clear evidence of a sustained decline in inflation emerges.
While policymakers appear to agree that interest rates are near their peak levels in the current tightening cycle, rates could also go higher if the economic data suggest the need.
Investors' enthusiasm about a possible rate cut powered a nine-week rally in the S&P500 index and the Nasdaq Composite, but in the new year, investors are recalibrating the rate path outlook.
Private Sector Expands In December, ADP Report
The private sector added payrolls at a faster-than-expected pace in December, highlighting the resilient U.S. labor market.
Private payrolls in the U.S. increased 164,000 in December, higher than a downwardly revised 101,000 in November, ADP reported Thursday.
The leisure and hospitality sector led the increase with an addition of 59,000, followed by increases in the construction sector by 24,000 and financial services by 18,000.
The closely watched nonfarm payroll data from the U.S. Labor Department is scheduled to be released on Friday, and economists are looking for the economy to add at least 160,000, according to a survey conducted by Ticker.com, following the increase of 199,000 in November.
Initial Weekly Jobless Claims Declined
The latest weekly jobless claims report showed a decline in layoffs, but labor market conditions remain tight.
Initial jobless claims declined from 18,000 to 202,000 for the week ended December 30, the U.S. Labor Department reported Thursday.
The four-week moving average, which smooths out week-to-week volatility, declined by 4,750 to 207,750.
Continuing claims for the week ending in the previous week eased by 31,000 to 1.855 million.
U.S. Indexes and Yields
The S&P 500 index decreased 0.01% to 4,746.15, and the Nasdaq Composite dropped 0.4% to 14,473.12.
The yield on 2-year Treasury notes increased to 4.35%, 10-year Treasury notes inched higher to 3.95%, and 30-year Treasury bonds eased to 4.10%.
WTI crude oil increased $0.85 to $73.55 a barrel, and natural gas prices increased 11 cents to $2.78 a thermal unit.
Gold decreased $5.07 to $2,045.76 an ounce, and the yellow metal price traded down for the second day after investors dialed back rate-cut optimism.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 102.32.
U.S. Stock Movers
Walgreens Boots Alliance increased 0.1% to $25.60 after the pharmacy operator reported fiscal first-quarter earnings and revenues that were ahead of market expectations.
Cal-Maine Foods dropped 5.2% to $52.05 after the egg producer reported fiscal second-quarter results.
Revenue plunged in the quarter after the average selling price per dozen fell to $1.70 from $2.70 and the number of dozne eggs sold increased to 288.2 million from 284.0 million, respectively, in the previous year.
Revenue in the quarter dropped to $523.2 million from $801.7 million, net income declined to $16.6 million from $198.3 million, and diluted earnings per share dropped to 35 cents from $4.07 a year ago.
Apple declined 1.2% to $182.0 after an analyst at Piper Sandler lowered his views on the tech giant.
Meta Platforms increased 0.1% to $344.80, and chief executive Mark Zuckerberg sold more than $400 million in the company's share at the end of last year as a part of a trading plan that was previously announced.
Ford Motor Company decreased 0.01% to $11.70, and the company announced a price increase for some of its electric F-150 Lightning pickup trucks.
- Inga Muller
- 04 Jan, 2024
- Frankfurt
European market indexes rebounded from three-week lows, and investors reviewed the latest updates on business activity indexes in Spain and Italy.
Consumer price inflation accelerated in France to 3.7% in December from 3.5% in November, and the regional data from Germany suggested that inflation is likely to accelerate in the nation.
The DAX index increased 0.3% to 16,594.26, the CAC-40 index rose 0.4% to 7,437.45, and the FTSE 100 index inched higher by 0.1% to 7,690.09.
The yield on 10-year German bonds decreased to 2.06%; French bonds inched higher to 2.61%; the UK gilts edged up to 3.69%; and Italian bonds advanced to 3.75%.
Energy stocks advanced after the crude oil price extended a 3-day gain amid rising tensions in the Middle East and growing violence in the Red Sea lanes, which prompted worries about supply disruptions.
U.S. President Joe Biden warned that the U.S. Navy fleet will attack Houthi installations unless rebels stop attacking merchant cargo ships traveling through Red Sea lanes.
The joint statement included support from the U.S., Japan, the UK, and Germany.
Telefonica SA rose 1% to €3.68 after the Spanish telecom operator signed an agreement with a trade union to lay off up to 3,421 staff.
The company will also take a charge of €1.3 billion linked to its layoff plan.
Nordex SE increased 2.2% to €10.04 after the company said it received an order to supply 106 MW of wind turbines from Spanish electricity producer Capital Energy.
The company did not disclose any financial details related to the order.
Evotec SE dropped 19% to €17.36 after the German biotech company said chief executive Werner Lanthaler stepped down from the office for personal reasons.
Next plc advanced 4.7% to €17.36 pence after the retailer lifted its profit outlook after sales in the pre-Christmas period were ahead of the company's expectations.
The company increased its full-year pre-tax profit estimate by £20 million to £905 million, up 4.0% from a year ago.
The retailer lifted its after-tax earnings per share estimate to 569.9 pence from the previous estimate of 557.7 pence released in November.
JD Sports Fashion PLC plunged 23.7% to 118.35 pence after the specialty retailer lowered its full-year profit estimate.
The retailer estimated profit before tax and adjusted items between £915 million and £935 million for the full-year ending on February 3.
The company added organic sales in the 22-week period ending on December 30 increased 6% and comparable sales were 1.8%, both were below management's expectations.
- Bridgette Randall
- 04 Jan, 2024
- Frankfurt
European markets advanced in Thursday's trading, and investors reviewed the latest batch of economic releases.
France's consumer price inflation accelerated to 3.7% in December from 3.5% in the previous month, the statistical agency reported Thursday.
Spain's private sector activity expanded for the first time in three months in December.
The HCOB Spain Composite PMI increased to 50.4 in December from 49.8 in November, S&P Global reported in its monthly update.
Italy's private sector activity contracted at a softer pace in December, S&P Global reported in a separate report today.
The HCOB Italy Composite PMI increased to 48.6 from 48.1 in November, indicating a contraction in private sector activities for the seventh month in a row.
UK net mortgage approvals increased by 50,067 in November, the Bank of England reported Thursday.
Net mortgage approval rose to a five-month high, but the increase remained muted due to the rising mortgage rates and elevated home prices in the nation.
The effective interest rate, reflecting the mortgage rate paid by the borrower, increased by 9 basis points to 5.34%.
Investors also reviewed the latest minutes of the meeting released by the U.S. Federal Reserve.
Rate-setting committee members appeared to conclude that interest rates are nearing peak rates in the current tightening cycle, but participants were not sure if and when rates would need to be lowered.
Committee members noted that economic growth is moderating, inflation is easing but still remains above the preferred level, and labor market conditions are weakening but still remain tight.
Most participants appeared to support the view that future economic data will provide more insights about the appropriate level of interest rates and whether higher rates are needed in the long term.
Europe Indexes and Yields
The DAX index increased 0.3% to 16,594.26, the CAC-40 index rose 0.4% to 7,437.45, and the FTSE 100 index inched higher by 0.1% to 7,690.09.
The yield on 10-year German bonds decreased to 2.06%; French bonds inched higher to 2.61%; the UK gilts edged up to 3.69%; and Italian bonds advanced to 3.75%.
The euro edged lower to $1.095, the British pound inched lower to $1.272, and the U.S. dollar eased to 84.91 Swiss cents.
Brent crude increased $0.74 to $78.99 a barrel, and the Dutch TTF natural gas increased by €0.85 to €33.65 per MWh.
Europe Stock Movers
Energy stocks advanced after the crude oil price extended a 3-day gain amid rising tensions in the Middle East and growing violence in the Red Sea lanes, which prompted worries about supply disruptions.
U.S. President Joe Biden warned that the U.S. Navy fleet will attack Houthi installations unless rebels stop attacking merchant cargo ships traveling through Red Sea lanes.
The joint statement included support from the U.S., Japan, the UK, and Germany.
Telefonica SA rose 1% to €3.68 after the Spanish telecom operator signed an agreement with a trade union to lay off up to 3,421 staff.
The company will also take a charge of €1.3 billion linked to its layoff plan.
Nordex SE increased 2.2% to €10.04 after the company said it received an order to supply 106 MW of wind turbines from Spanish electricity producer Capital Energy.
The company did not disclose any financial details related to the order.
Evotec SE dropped 19% to €17.36 after the German biotech company said chief executive Werner Lanthaler stepped down from the office for personal reasons.
Next plc advanced 4.7% to €17.36 pence after the retailer lifted its profit outlook after sales in the pre-Christmas period were ahead of the company's expectations.
JD Sports Fashion PLC plunged 23.7% to 118.35 pence after the specialty retailer lowered its full-year profit estimate.