- Barry Adams
- 05 Jan, 2023
- New York City
U.S. stocks traded lower after two separate reports indicated a stable and healthy labor market, raising the prospects of the Federal Reserve continuing its hawkish stance.
Private sector job additions accelerated in December and weekly jobless claims at the end of last week dropped to the low last seen three months ago.
After the release of the reports, bond yields edged slightly higher and commodities traded volatile.
Investors are awaiting December jobs report on Friday and are hoping that total payroll expansion may be smaller than in November when the economy added 263,000 jobs.
Monthly job growth in the first eleven months in 2022 averaged 392,000.
Natural gas prices plunged 10% to the low last seen about a year ago after a report from the government agency showed a smaller-than-expected decline in inventories.
Private Sector Job Additions Accelerated In December
Private sector accelerated adding new jobs in December, providing another positive signal about the health of the U.S. labor market.
U.S. private businesses added 235,000 net new jobs in December after adding 182,000 jobs in November, according to the ADP monthly survey released Thursday.
Service sector jobs expanded by 213,000 led by 135,000 jobs in leisure and hospitality, 52,000 in professional business services and 42,000 in education and health services.
Jobless Claims Drops to 3-month Low
The initial claims fell to the lowest level since September indicating tight labor market conditions and health of the U.S. economy.
The number of people filing unemployment claims declined to 204,000 in the week ending December 31 from the previous week's revised level of 223,000, the Department of Labor reported Thursday.
The 4-week moving average declined to 213,750 from 220,500 in the previous 4-week period.
U.S. Trade Deficit Drops In November
The U.S. trade deficit fell more than expected in November, according to the latest data from the U.S. Bureau of Economic Analysis.
International trade deficit of goods and services declined to $61.5 billion in November, down $16.3 billion from the revised $77.8 billion in October.
Total exports of goods and services fell 2% to $251.9 billon and imports fell 6.4% to $313.4 billion.
The deficit with China fell $5.8 billion to $20.4 billion and the shortfall with the European Union narrowed $3.6 billion to $19.5 billion.
U.S. Indexes In Review
Benchmark indexes are likely to extend recent weekly loss string to the fifth week if indexes close down on Friday.
The S&P 500 index fell 1.1% to 3,808.12 and the Nasdaq Composite index declined 1.1% 5o 10,305.24.
Natural prices dropped on the worries that the demand may be easing amid unusually warm weather across the nation.
Natural Gas Drops 10%
U.S. utilities withdrew 221 billion cubic feet of gas from storage during the week ended December 30th, according to the Energy Information Administration report released Thursday.
The decline in inventories was still significantly higher than 31 bcf fall in the similar week a year ago and higher than the five-year average of 98 bcf after colder-than-normal weather forced consumers and businesses to burn more gas.
Crude oil futures price rose $1.07 to $73.91 a barrel and natural gas futures contract dropped 10% or 39 cents to $3.78 a thermal unit.
Treasury Yields Advance
The yield on 2-year Treasury notes increased to 4.46%, 10-year Treasury notes edged up to 3.72% and 30-year Treasury bonds inched down to 3.80%.
European Markets Rest On U.S. Rate Path Worries
European markets turned weaker after three days of gains and market sentiment turned cautious after the release of the U.S. Fed policy meeting minutes.
Market indexes struggled to gain traction after investors weighed the easing of inflation in Italy and the U.S. policy makers expressed support for raising rates to restrictive levels.
Investors also were on the backfoot after two separate jobs reports highlighted tight labor market conditions in the U.S. sending signals for the Federal Reserve to continue to lift rates in 2023.
German Trade Surplus Expands In November
Germany's international trade surplus increased in November after imports fell at a faster pace than exports, the Federal Statistics Office said Thursday.
International trade surplus in November rose to a seasonally adjusted
- Bridgette Randall
- 05 Jan, 2023
- Frankfurt
European markets turned weaker after three days of gains and market sentiment turned cautious after the release of the U.S. Fed policy meeting minutes.
Market indexes struggled to gain traction after investors weighed the easing of inflation in Italy and the U.S. policy makers expressed support for raising rates to restrictive levels.
Investors also were on the backfoot after two separate jobs reports highlighted tight labor market conditions in the U.S. sending signals for the Federal Reserve to continue to lift rates in 2023.
German Trade Surplus Expands In November
Germany's international trade surplus increased in November after imports fell at a faster pace than exports, the Federal Statistics Office said Thursday.
International trade surplus in November rose to a seasonally adjusted
- Scott Peters
- 05 Jan, 2023
- New York City
Amazon.com, Inc declined 1.9% to $83.51 after the online retailer confirmed its plan to lay off 18,000, after rapidly expanding its workforce in the pandemic years by 75% to 1.5 million at the end of the third quarter 2022.
Bed Bath & Beyond plunged 24.5% to $1.88 after the retailer said that the company is considering filing for bankruptcy and the retailer is running out of cash on weaker-than-expected sales.
Silvergate Capital Corp plunged 40% to $13.10 after the cryptocurrency focused bank said its digital asset plunged in the December quarter.
Total digital assets declined to $3.8 billion at the end of December from $11.9 billion at the end of September quarter.
Approximately $150 million of the bank's deposits were from customers that have filed for bankruptcy. as of the end of December 2022.
The company also announced it plans to layoff 200 people or 40% of its staff and plans to end its mortgage warehouse lending business.
To accommodate sharp withdrawal the bank sold $5.2 billion of debt securities resulting in a loss of $718 million during the fourth quarter of 2022.
Silvergate priced its initial public offering at $12 a share and sold 3.33 million shares on November 6, 2019 and the stock peaked at $219.75 on November 19, 2021 reflecting the peak price of bitcoin in the same month.
Lamb Weston Holdings increased 9.9% to $96.05 after the supplier of frozen potatoes and vegetables reported a rise in earnings and sales and lifted its full-year estimate.
Net sales in the quarter ending in November rose 28% to $1.28 billion from $1.0 billion a year ago.
Net income in the quarter increased to $103.1 million from $32.5 million and diluted earnings per share rose to 71 cents from 22 cents a year ago.
Conagra Brands Inc increased 2.7% to $39.72 after the food company reported fiscal second quarter results and lifted its current quarter outlook.
Revenue in the quarter ending in November rose 8.3% to $3.3 billion from $3.1 billion a year ago. Organic net sales increased 8.6%.
Net income in the quarter increased 39% to $381.9 million from $275.5 million and diluted earnings per share rose to 80 cents from 57 cents a year ago.
The food company revised higher its second quarter organic sales increase between 7% and 8% compared to a year ago.
Walgreens Boots Alliance Inc fell 6.4% to $35.09 after the pharmacy chain reported earnings ahead of expectations and lifted its full-year guidance.
Revenue in the fiscal first quarter ending in November fell 1.5% to $33.3 billion from $33.9 billion a year ago.
The retailer swung in the quarter to a net loss of $3.72 billion from a profit of $3.58 billion and diluted loss per share was $4.31 from diluted earnings per share of $4.12 a year ago.
Walgreens swung to a loss after accounting for $5.2 billion after-tax charge linked to opioid-related claims and litigation.
The company lifted full-year sales outlook between $133.5 billion and $137.5 billion, reflecting acquisition of Summit Health.
- Brian Turner
- 05 Jan, 2023
- New York City
U.S. utilities withdrew 221 billion cubic feet of gas from storage during the week ended December 30th, according to the Energy Information Administration report released Thursday.
The decline in inventories was still significantly higher than 31 bcf fall in the similar week a year ago and higher than 98 bcf five-year average after colder-than-normal weather forced consumers and businesses to burn more gas.
Crude oil futures price rose 88 cents to $73.66 a barrel and natural gas futures price dropped 12% or 50 cents to $3.66 a thermal unit.
- Brian Turner
- 05 Jan, 2023
- New York City
The U.S. trade deficit fell more than expected in November, according to the latest data from the U.S. Bureau of Economic Analysis.
International trade deficit of goods and services declined to $61.5 billion in November, down $16.3 billion from the revised $77.8 billion in October.
In November 2021, trade deficit was $77.97 billion.
Total exports of goods and services fell 2% to $251.9 billon and imports fell 6.4% to $313.4 billion.
The deficit with China fell $5.8 billion to $20.4 billion and the shortfall with the European Union narrowed $3.6 billion to $19.5 billion.
Year-to-date, the goods and services deficit increased 15.7% from a year ago to $120.1 billion.
Exports increased 18.9% to $439.4 billion and imports rose 18.1% to $559.5 billion.
- Barry Adams
- 05 Jan, 2023
- New York City
U.S. stocks traded lower after two separate reports indicated a stable and healthy labor market, raising the prospects of the Federal Reserve continuing its hawkish stance.
Private sector job additions accelerated in December and weekly jobless claims at the end of last week dropped to the low last seen three months ago.
After the release of the reports, bond yields edged slightly higher and commodities traded volatile.
Natural gas prices plunged 10% to the low last seen about a year ago after a report from the government agency showed a smaller-than-expected decline in inventories.
Private Sector Job Additions Accelerated In December
Private sector accelerated adding new jobs in December, providing another positive signal about the health of the U.S. labor market.
U.S. private businesses added 235,000 net new jobs in December after adding 182,000 jobs in November, according to the ADP monthly survey released Thursday.
Service sector jobs expanded by 213,000 led by 135,000 jobs in leisure and hospitality, 52,000 in professional business services and 42,000 in education and health services.
Jobless Claims Drops to 3-month Low
The initial claims fell to the lowest level since September indicating tight labor market conditions and health of the U.S. economy.
The number of people filing unemployment claims declined to 204,000 in the week ending December 31 from the previous week's revised level of 223,000, the Department of Labor reported Thursday.
The 4-week moving average declined to 213,750 from 220,500 in the previous 4-week period.
U.S. Trade Deficit Drops In November
The U.S. trade deficit fell more than expected in November, according to the latest data from the U.S. Bureau of Economic Analysis.
International trade deficit of goods and services declined to $61.5 billion in November, down $16.3 billion from the revised $77.8 billion in October.
Total exports of goods and services fell 2% to $251.9 billon and imports fell 6.4% to $313.4 billion.
The deficit with China fell $5.8 billion to $20.4 billion and the shortfall with the European Union narrowed $3.6 billion to $19.5 billion.
U.S. Indexes In Review
The S&P 500 index fell 1.0% to 3,814.62 and the Nasdaq Composite index declined 1.1% to 10,342.96.
Natural prices dropped on the worries that the demand may be easing amid unusually warm weather across the nation.
Natural Gas Drops 10%
U.S. utilities withdrew 221 billion cubic feet of gas from storage during the week ended December 30th, according to the Energy Information Administration report released Thursday.
The decline in inventories was still significantly higher than 31 bcf fall in the similar week a year ago and higher than 98 bcf five-year average after colder-than-normal weather forced consumers and businesses to burn more gas.
Crude oil futures price rose 88 cents to $73.66 a barrel and natural gas futures price dropped 12% or 50 cents to $3.66 a thermal unit.
Treasury Yields Advance
The yield on 2-year Treasury notes increased to 4.45%, 10-year Treasury notes edged up to 3.72% and 30-year Treasury bonds inched down to 3.79%.
Japanese Yen Drop and Tech Stocks Rebound
Japan's market indexes closed higher following the weakness in the yen and China optimism lifted indexes in Shanghai and Hong Kong.
The Nikkei 225 average gained 0.4% to 25,820.80 after the yen edged lower to 132.78 against the U.S. dollar.
Tech stocks and exporters led the gainers in Tokyo trading today. Nippon Sheet Glass led the gainers with a rise of 7.5%.
Softbank Group, Sony, Advantest and Tokyo Electron gained between 2% and 4%.
Toyota Motor, Honda Motor and Nissan Motor fluctuated between a gain and a loss of 1% on the hopes that the revival in economic growth may lift global sales.
PBOC Offers to Support Targeted Help, Hong Kong Extends Rally
The Chinese government said it will reopen its border with Hong Kong on January 8, nearly three years after halting travel between the mainland and the island to contain the spread of Covid virus.
Hong Kong extended three week gains to 12% and 4% in the year so far after the People's Bank of China said it plans to provide more financial support to the struggling property sector after its annual work conference.
Alibaba.com led the gainers after the company accelerated its restructuring of Ant Financial Services Group after the banking regulators permitted the company to increase its capital to 18.5 billion yuan from 8 billion yuan.
The move will also allow the payment processor and financial services provider to expand its consumer base and potentially revive the listing of Ant Financial in Hong Kong.
The Shanghai Composite index soared 1.1% to 3,155.22 and the Hang Seng index advanced 1.3% to 21,052.17.
Market indexes in China rebounded despite the service sector activities contracted for the fourth month in a row in December, though the pace of decline fell.
The Caixin/S&P Global PMI Services Index increased to 48 in December from 46.7% in November.
- Arjun Pandit
- 05 Jan, 2023
- Mumbai
Japan's market indexes closed higher following the weakness in the yen and China optimism lifted indexes in Shanghai and Hong Kong.
The Nikkei 225 average gained 0.4% to 25,820.80 after the yen edged lower to 132.78 against the U.S. dollar.
Tech stocks and exporters led the gainers in Tokyo trading today. Nippon Sheet Glass led the gainers with a rise of 7.5%.
Softbank Group, Sony, Advantest and Tokyo Electron gained between 2% and 4%.
Toyota Motor, Honda Motor and Nissan Motor fluctuated between a gain and a loss of 1% on the hopes that the revival in economic growth may lift global sales.
The Chinese government said it will reopen its border with Hong Kong on January 8, nearly three years after halting travel between the mainland and the island to contain the spread of Covid virus.
Hong Kong extended three week gains to 12% and 4% in the year so far after the People's Bank of China said it plans to provide more financial support to the struggling property sector after its annual work conference.
Alibaba.com led the gainers after the company accelerated its restructuring of Ant Financial Services Group after the banking regulators permitted the company to increase its capital to 18.5 billion yuan from 8 billion yuan.
The move will also allow the payment processor and financial services provider to expand its consumer base and potentially revive the listing of Ant Financial in Hong Kong.
The Shanghai Composite index soared 1.1% to 3,155.22 and the Hang Seng index advanced 1.3% to 21,052.17.
Market indexes in China rebounded despite the service sector activities contracted for the fourth month in a row in December, though the pace of decline fell.
The Caixin/S&P Global PMI Services Index increased to 48 in December from 46.7% in November.
- Barry Adams
- 04 Jan, 2023
- New York City
Benchmark indexes spent the session in the positive zone but lacked direction in volatile trading.
Investors are struggling to determine the future direction of interest rates, inflation and corporate earnings amid mixed signals from the economy.
The latest jobs survey showed the labor market remained strong and the December Fed's minutes of meeting failed to provide any additional insights in the inner workings of the economy.
Fed policy committee members generally supported higher rates and raised their estimates of interest rates in 2023 but policymakers also reinforced the need to increase rates until they are restrictive for the economy.
At the last meeting in December, the Federal Reserve raised its key lending rate range to between 4.25% and 4.50%, the highest level in 15 years.
The economic projections provided along with the rate decision also suggested rates are likely to rise as high as 5.1% in 2023 from the previous estimate of 4.6%.
"Participants generally observed that maintaining a restrictive policy stance for a sustained period until inflation is clearly on a path toward 2 percent is appropriate from a risk-management perspective," noted the December minutes of meeting.
Overseas, inflation continued to drift lower in France, Germany, Spain and Switzerland but business and consumer spending continued to remain weak in China, fueling the prospect of slower or no economic growth worldwide.
Indexes In Review
Two popular benchmark indexes struggled to get traction after latest job data indicated strong labor market conditions but mortgage applications dropped to the lowest level since 1996.
The S&P 500 index rose 0.75% to 3,852.97 and the Nasdaq Composite index increased 0.7% to 10,458.76.
Crude Oil and Natural Gas Fall
Crude oil prices fell for the second week in a row amid the rising supply and falling demand growth.
Brent crude dropped near the one-year of $75.60 a barrel low last seen on December 9th on warmer than expected weather in Europe.
WTI crude future for the immediate month delivery also fell near the one-year low $70.30 a barrel reached on December 9.
WTI crude oil declined 5% or $3.78 to $73.11 a barrel and natural gas rose 4.2% or 16 cents to $4.15 a thermal unit.
Treasury Yields Eased Again
The yields on U.S. treasury bonds continued to drift lower as investors piled into government securities on the expectations that the Federal Reserve Bank will gradually slow its future rate hikes.
The yield on 2-year Treasury notes decreased to 4.36% and 10-year Treasury notes fell to 3.68% and 30-year Treasury bonds dropped to 3.80%.
U.S. Stock Movers
China-linked stocks were in focus again today on the ongoing speculation on the rebound in business and travel activities after the abrupt ending of zero-covid restrictions.
Tesla rose 3.3% to $111.49 on the hopes that China sales will revive soon. The company also extended 10,000 yuan ($1,388) offered in the last two weeks for vehicles made in Shanghai till the end of January.
China's economic growth has dropped to its lowest pace in decades after the flare-up of Covid-infections and steep job losses in the tech sector.
Rivian Automotive fell 0.2% to $17.37 after the electric vehicle maker missed its production target.
Job Opening Eased In November
Job openings in the U.S. fell slightly in November, indicating the job market strength, according to the latest data released by the Bureau of Labor Statistics.
Job openings in November declined 54,000 to 10.5 million and have slowly eased after hitting 11.9million peak in March.
Over the month, the number of hires and total separations changed little at 6.1 million and 5.9 million, respectively.
Mortgage Applications Down to 26-year Low
Mortgage applications dropped 13.2% from two weeks earlier in the week ending in December according to the latest survey released by the Mortgage Bankers Association.
The Market Composite Index, a measure of mortgage loan application volume, decreased 13.2% on a seasonally adjusted basis from two weeks earlier.
On an unadjusted basis, the Index decreased 39.4 percent compared with the two weeks ago