- Barry Adams
- 08 Jan, 2025
- New York City
U.S. market indexes traded down following a sharp decline in the previous session amid renewed worries about the resurgent inflation and future rate paths.
The S&P 500 index and the Nasdaq Composite declined 0.3% as investors dialed down expectations for additional rate cuts.
Market sentiment soured after the ISM Services PMI showed the continued expansion in business activities, but participants raised inflation expectations in the months ahead.
Despite the Fed's insistence that interest rate policies are restrictive, prices are still rising at nearly a 4% annual rate in the service sector, significantly higher than the target rate of 2%.
Moreover, higher tariffs on imported goods are going to fuel inflationary forces, which could force the Fed to pivot to raising rates from its current plan to cut rates by as much as 100 basis points in the new year.
Benchmark indexes are likely to stay under pressure ahead of Friday's non-farm payrolls report.
The private sector added 122,000 jobs in December, the slowest pace of increase in four months, according to the latest estimate released by ADP.
ADP employment is highly unreliable, and the estimates are subject to sharp revisions in the months ahead.
Initial jobless claims declined 10,000 to 201,000 in the week ending on Jan 4, the U.S. Department of Labor reported Wednesday.
Stock markets are closed for trading on Thursday in honor of the late U.S. President, Jimmy Carter.
U.S. Indexes and Treasury Yields
The S&P 500 index decreased 0.2% to 5,901.23, the Nasdaq Composite fell 0.1% to 19,476.35, and the Russell 2000 index inched down by 0.1% to 2,224.63.
The yield on 2-year Treasury notes edged higher to 4.29%, 10-year Treasury notes inched up to 4.71%, and 30-year Treasury bonds increased to 4.96%.
WTI crude oil increased $0.60 to $74.85 a barrel, and natural gas prices edged up 13 cents to $3.55 a thermal unit.
Gold increased by $3.30 to $2,652.16 an ounce, and silver rose by $0.03 to $30.06.
The dollar index, which weighs the US currency against a basket of foreign currencies, decreased by 0.51 to 109.18 and traded at a two-year high.
U.S. Stock Movers
Cal-Maine Foods increased 4.8% to $108.60 after the egg-producing company reported its latest quarterly results.
Revenue in the quarter ending on November 30 increased 82% to $954.7 million from $523.3 million, net income advanced to $218.3 million from $16.6 million, and diluted earnings per share jumped to $4.47 from 35 cents a year ago.
AAR Corp. jumped 4.5% to $64.50 after the aviation company reported better-than-expected fiscal second quarter results.
Revenue in the fiscal second quarter ending in November increased 26% to $686 million, net income swung to a loss of $30.6 million from a profit of $23.8 million, and diluted earnings per share were a loss of 87 cents compared to an income of 67 cents a year ago.
- Barry Adams
- 08 Jan, 2025
- New York City
U.S. market indexes traded down following a sharp decline in the previous session amid renewed worries about the resurgent inflation and future rate paths.
The S&P 500 index and the Nasdaq Composite declined 0.3% as investors dialed down expectations for additional rate cuts.
Market sentiment soured after the ISM Services PMI showed the continued expansion in business activities, but participants raised inflation expectations in the months ahead.
Despite the Fed's insistence that interest rate policies are restrictive, prices are still rising at nearly a 4% annual rate in the service sector, significantly higher than the target rate of 2%.
Moreover, higher tariffs on imported goods are going to fuel inflationary forces, which could force the Fed to pivot to raising rates from its current plan to cut rates by as much as 100 basis points in the new year.
Benchmark indexes are likely to stay under pressure ahead of Friday's non-farm payrolls report.
The private sector added 122,000 jobs in December, the slowest pace of increase in four months, according to the latest estimate released by ADP.
ADP employment is highly unreliable, and the estimates are subject to sharp revisions in the months ahead.
Initial jobless claims declined 10,000 to 201,000 in the week ending on Jan 4, the U.S. Department of Labor reported Wednesday.
Stock markets are closed for trading on Thursday in honor of the late U.S. President, Jimmy Carter.
U.S. Indexes and Treasury Yields
The S&P 500 index decreased 0.2% to 5,879.23, the Nasdaq Composite fell 0.1% to 19,406.35, and the Russell 2000 index inched down by 0.1% to 2,224.63.
The yield on 2-year Treasury notes edged higher to 4.29%, 10-year Treasury notes inched up to 4.71%, and 30-year Treasury bonds increased to 4.96%.
WTI crude oil increased $0.60 to $74.85 a barrel, and natural gas prices edged up 13 cents to $3.55 a thermal unit.
Gold increased by $3.30 to $2,652.16 an ounce, and silver rose by $0.03 to $30.06.
The dollar index, which weighs the US currency against a basket of foreign currencies, decreased by 0.51 to 109.18 and traded at a two-year high.
U.S. Stock Movers
Cal-Maine Foods increased 4.8% to $108.60 after the egg-producing company reported its latest quarterly results.
Revenue in the quarter ending on November 30 increased 82% to $954.7 million from $523.3 million, net income advanced to $218.3 million from $16.6 million, and diluted earnings per share jumped to $4.47 from 35 cents a year ago.
AAR Corp. jumped 4.5% to $64.50 after the aviation company reported better-than-expected fiscal second quarter results.
Revenue in the fiscal second quarter ending in November increased 26% to $686 million, net income swung to a loss of $30.6 million from a profit of $23.8 million, and diluted earnings per share were a loss of 87 cents compared to an income of 67 cents a year ago.
- Inga Muller
- 08 Jan, 2025
- Frankfurt
Bond yields in Europe advanced, and the euro hovered near a multi-year low amid uncertainties related to the rate path and weak domestic economic growth outlook.
The DAX index increased by 0.2% to 20,255.52; the CAC-40 index rose by 0.5% to 7,480.62; and the FTSE 100 index inched lower by 0.2% to 8,233.65.
The yield on 10-year German bonds edged higher to 2.49%, French bonds rose to 3.31%, the UK gilts increased to 4.71%, and Italian bonds rose to 3.62%.
TeamViewer SE soared 10.5% to €10.58 after the remote computer access and control company reported higher-than-expected full-year revenue.
Flutter Entertainment SE decreased 2.5% to 20,010.0 pence after the online gambling company lowered its U.S. revenue and profit outlook for 2024.
Shell PLC declined 1.8% to 2,570.50 pence after the UK-based energy company trimmed its LNG production outlook for the fourth quarter.
Pluxee NV soared 12.6% to €21.16 after the employee benefit company reported better-than-expected fiscal first quarter total revenue.
Total revenue in the fiscal first quarter increased 13.2% to €289 million, and the company reiterated its annual outlook.
- Inga Muller
- 08 Jan, 2025
- Frankfurt
Bond yields in Europe advanced, and the euro hovered near a multi-year low amid uncertainties related to the rate path and weak domestic economic growth outlook.
The DAX index increased by 0.2% to 20,255.52; the CAC-40 index rose by 0.5% to 7,480.62; and the FTSE 100 index inched lower by 0.2% to 8,233.65.
The yield on 10-year German bonds edged higher to 2.49%, French bonds rose to 3.31%, the UK gilts increased to 4.71%, and Italian bonds rose to 3.62%.
TeamViewer SE soared 10.5% to €10.58 after the remote computer access and control company reported higher-than-expected full-year revenue.
Flutter Entertainment SE decreased 2.5% to 20,010.0 pence after the online gambling company lowered its U.S. revenue and profit outlook for 2024.
Shell PLC declined 1.8% to 2,570.50 pence after the UK-based energy company trimmed its LNG production outlook for the fourth quarter.
Pluxee NV soared 12.6% to €21.16 after the employee benefit company reported better-than-expected fiscal first quarter total revenue.
Total revenue in the fiscal first quarter increased 13.2% to €289 million, and the company reiterated its annual outlook.
- Bridgette Randall
- 08 Jan, 2025
- London
European stock market indexes advanced despite worries about interest rates and the threat of potential U.S. tariffs.
Benchmark indexes in Paris, Frankfurt, Milan, and London advanced, and bond yields edged higher, tracking the yields on the U.S. Treasury notes.
The euro hovered near a two-year low ahead of the release of Friday's U.S. nonfarm payrolls report, which could support the Fed's view of fewer and slower rate cuts in 2025.
On the economic front, Germany's factory orders unexpectedly declined and retail sales fell, and the Euro Area producer prices rose at the fastest pace since 2022.
Germany's Factory Orders Dropped In November
Germany's factory orders for manufactured goods declined 5.4% from the previous month and fell 1.7% from a year ago in November, the Federal Statistics Office, or Destatis, reported Wednesday.
The main reason for the decline in orders was the 58.4% plunge from the previous month in large orders, which generally includes aircraft, trains, and ships.
However, excluding large orders, incoming orders were 0.2% higher than in the previous month.
Domestic orders rose by 3.8% compared to the previous month, and foreign orders fell by 10.8%. Orders from the eurozone fell by 3.8%, and from outside the eurozone dropped by 14.8%.
In the less volatile three-month comparison, incoming orders between September and November 2024 were 1.7% higher overall and, excluding large orders, 0.5% higher than in the previous three months.
Germany's Retail Sales Highlight Struggling Consumer
Retail sales in Germany in November highlighted lackluster consumer demand amid the cost of living crisis and elevated inflation.
Nominal retail sales, not adjusted for seasonal factors and inflation, decreased 0.6% from the previous month but rose 3.5% from a year ago, the statistical office reported Wednesday.
Nominal sales in the food retail sector increased 0.2% from the previous month and rose 3.8% from a year ago.
Nominal sales in the non-food retail sector rose 2.5% from a year ago and decreased 1.7% from the previous month.
Monthly Eurozone Producer Prices Accelerated In November
Producer prices in the Euro Area accelerated for the second month in a row in November due to a sustained rise in energy costs.
Producer prices jumped 1.6% from the previous month in November, following a 0.4% increase in October, Eurostat reported Wednesday.
On an annual basis, producer prices declined 1.2% after falling 3.3% in October.
Across the largest four economies in the currency bloc, producer prices increased 3.2% in France, 2.7% in Spain, 1.8% in Italy, and 0.6% in Germany.
Europe Indexes and Yields
The DAX index increased by 0.2% to 20,255.52; the CAC-40 index rose by 0.5% to 7,480.62; and the FTSE 100 index inched lower by 0.2% to 8,233.65.
The yield on 10-year German bonds edged higher to 2.49%, French bonds rose to 3.31%, the UK gilts increased to 4.71%, and Italian bonds rose to 3.62%.
The euro edged lower to $1.03; the British pound inched lower to $1.246; and the U.S. dollar eased to 91.16 Swiss cents.
Brent crude increased $0.08 to $76.97 a barrel, and the Dutch TTF natural gas fell by €1.21 to €46.72 per MWh.
Europe Stock Movers
TeamViewer SE soared 10.5% to €10.58 after the remote computer access and control company reported higher-than-expected full-year revenue.
Flutter Entertainment SE decreased 2.5% to 20,010.0 pence after the online gambling company lowered its U.S. revenue and profit outlook for 2024.
Shell PLC declined 1.8% to 2,570.50 pence after the UK-based energy company trimmed its LNG production outlook for the fourth quarter.
Pluxee NV soared 12.6% to €21.16 after the employee benefit company reported better-than-expected fiscal first quarter total revenue.
Total revenue in the fiscal first quarter increased 13.2% to €289 million, and the company reiterated its annual outlook.
- Bridgette Randall
- 08 Jan, 2025
- London
European stock market indexes advanced despite worries about interest rates and the threat of potential U.S. tariffs.
Benchmark indexes in Paris, Frankfurt, Milan, and London advanced, and bond yields edged higher, tracking the yields on the U.S. Treasury notes.
The euro hovered near a two-year low ahead of the release of Friday's U.S. nonfarm payrolls report, which could support the Fed's view of fewer and slower rate cuts in 2025.
On the economic front, Germany's factory orders unexpectedly declined and retail sales fell, and the Euro Area producer prices rose at the fastest pace since 2022.
Germany's Factory Orders Dropped In November
Germany's factory orders for manufactured goods declined 5.4% from the previous month and fell 1.7% from a year ago in November, the Federal Statistics Office, or Destatis, reported Wednesday.
The main reason for the decline in orders was the 58.4% plunge from the previous month in large orders, which generally includes aircraft, trains, and ships.
However, excluding large orders, incoming orders were 0.2% higher than in the previous month.
Domestic orders rose by 3.8% compared to the previous month, and foreign orders fell by 10.8%. Orders from the eurozone fell by 3.8%, and from outside the eurozone dropped by 14.8%.
In the less volatile three-month comparison, incoming orders between September and November 2024 were 1.7% higher overall and, excluding large orders, 0.5% higher than in the previous three months.
Germany's Retail Sales Highlight Struggling Consumer
Retail sales in Germany in November highlighted lackluster consumer demand amid the cost of living crisis and elevated inflation.
Nominal retail sales, not adjusted for seasonal factors and inflation, decreased 0.6% from the previous month but rose 3.5% from a year ago, the statistical office reported Wednesday.
Nominal sales in the food retail sector increased 0.2% from the previous month and rose 3.8% from a year ago.
Nominal sales in the non-food retail sector rose 2.5% from a year ago and decreased 1.7% from the previous month.
Monthly Eurozone Producer Prices Accelerated In November
Producer prices in the Euro Area accelerated for the second month in a row in November due to a sustained rise in energy costs.
Producer prices jumped 1.6% from the previous month in November, following a 0.4% increase in October, Eurostat reported Wednesday.
On an annual basis, producer prices declined 1.2% after falling 3.3% in October.
Across the largest four economies in the currency bloc, producer prices increased 3.2% in France, 2.7% in Spain, 1.8% in Italy, and 0.6% in Germany.
Europe Indexes and Yields
The DAX index increased by 0.2% to 20,255.52; the CAC-40 index rose by 0.5% to 7,480.62; and the FTSE 100 index inched lower by 0.2% to 8,233.65.
The yield on 10-year German bonds edged higher to 2.49%, French bonds rose to 3.31%, the UK gilts increased to 4.71%, and Italian bonds rose to 3.62%.
The euro edged lower to $1.03; the British pound inched lower to $1.246; and the U.S. dollar eased to 91.16 Swiss cents.
Brent crude increased $0.08 to $76.97 a barrel, and the Dutch TTF natural gas fell by €1.21 to €46.72 per MWh.
Europe Stock Movers
TeamViewer SE soared 10.5% to €10.58 after the remote computer access and control company reported higher-than-expected full-year revenue.
Flutter Entertainment SE decreased 2.5% to 20,010.0 pence after the online gambling company lowered its U.S. revenue and profit outlook for 2024.
Shell PLC declined 1.8% to 2,570.50 pence after the UK-based energy company trimmed its LNG production outlook for the fourth quarter.
Pluxee NV soared 12.6% to €21.16 after the employee benefit company reported better-than-expected fiscal first quarter total revenue.
Total revenue in the fiscal first quarter increased 13.2% to €289 million, and the company reiterated its annual outlook.
- Akira Ito
- 08 Jan, 2025
- Tokyo
Benchmark indexes in Tokyo traded down amid interest rate path worries and volatile tech stocks.
The Nikkei 225 stock average declined 0.2%, and the broader TOPIX index decreased 0.5%, but they managed to recover from the worst levels of the session.
Market sentiment was weak in Tokyo after the yield on the 10-year U.S. Treasury note rose to a seven-month high of 4.69%, following the release of December's service sector activities survey.
The service sector continued to expand for the tenth month in a row in December, but inflation expectations rose sharply ahead of the possible tariffs on imported goods by the president-elect Trump's administration as early as this month.
Benchmark indexes accelerated decline in the early hours of trading, mirroring a sharp sell-off in tech stocks in overnight trading in New York fueled by persistent inflation worries.
Investors lowered expectations for additional rate cuts in the imminent future after the release of the service index update.
Closer to home, investors are looking forward to the release of household spending and earnings data later in the week.
Japan Stock Movers
The Nikkei 225 Stock Average decreased 0.2% to 39,991.85, and the broader TOPIX index fell 0.5% to 2,771.61.
Semiconductor-related stocks rebounded from morning losses in Tokyo, mirroring declines on Wall Street in overnight trading.
Tokyo Electron Ltd. increased 1.5% to ¥27,520.0, Advantest Corp. gained 3.5% to ¥10,080.0, and Disco Corp. gained 4.6% to ¥48,570.0.
Honda Motor Corp. declined 0.4% to ¥1,599.50, Nissan Motor Corp. fell 2.5% to ¥466.80, and Toyota Motor Corp. added 0.9% to ¥3,080.0.
Tokio Marine Holdings dropped 4.5% to ¥5,481.0, Dai Ichi Life Holdings fell 3.4% to ¥4,275.0, and SOMPO Holdings eased 3.3% to ¥4,011.0.
- Akira Ito
- 08 Jan, 2025
- Tokyo
Benchmark indexes in Tokyo traded down amid interest rate path worries and volatile tech stocks.
The Nikkei 225 stock average declined 0.2%, and the broader TOPIX index decreased 0.5%, but they managed to recover from the worst levels of the session.
Market sentiment was weak in Tokyo after the yield on the 10-year U.S. Treasury note rose to a seven-month high of 4.69%, following the release of December's service sector activities survey.
The service sector continued to expand for the tenth month in a row in December, but inflation expectations rose sharply ahead of the possible tariffs on imported goods by the president-elect Trump's administration as early as this month.
Benchmark indexes accelerated decline in the early hours of trading, mirroring a sharp sell-off in tech stocks in overnight trading in New York fueled by persistent inflation worries.
Investors lowered expectations for additional rate cuts in the imminent future after the release of the service index update.
Closer to home, investors are looking forward to the release of household spending and earnings data later in the week.
Japan Stock Movers
The Nikkei 225 Stock Average decreased 0.2% to 39,991.85, and the broader TOPIX index fell 0.5% to 2,771.61.
Semiconductor-related stocks rebounded from morning losses in Tokyo, mirroring declines on Wall Street in overnight trading.
Tokyo Electron Ltd. increased 1.5% to ¥27,520.0, Advantest Corp. gained 3.5% to ¥10,080.0, and Disco Corp. gained 4.6% to ¥48,570.0.
Honda Motor Corp. declined 0.4% to ¥1,599.50, Nissan Motor Corp. fell 2.5% to ¥466.80, and Toyota Motor Corp. added 0.9% to ¥3,080.0.
Tokio Marine Holdings dropped 4.5% to ¥5,481.0, Dai Ichi Life Holdings fell 3.4% to ¥4,275.0, and SOMPO Holdings eased 3.3% to ¥4,011.0.
- Li Chen
- 08 Jan, 2025
- Hong Kong
Stock market indexes in China and Hong Kong declined amid geopolitical tensions and a weak corporate earnings outlook.
The Hang Seng index dropped 1%, and the mainland-focused CSI 300 index decreased 0.7%, as investors reacted to the sharp decline in Wall Street indexes in overnight trading.
The Hang Seng index extended losses for the third week in a row and wiped out most of the gains in the final quarter of 2024 after policymakers announced a raft of stimulus measures.
However, market enthusiasm has waned in the last five weeks of trading as policymakers failed to follow through with specific stimulus implementation steps.
The Hang Seng has dropped more than 15% from the peak of 23,077 reached on October 7, and traders are bracing for the index to test 17,249, the level before the stimulus announcements.
Moreover, market sentiment was dented after the U.S. service sector continued to grow for the tenth month in a row in December, but inflation expectations also rose amid potential tariffs on imported goods.
The latest service sector strength and inflation expectations confirmed that the Federal Reserve may not need to lower rates in the imminent future, keeping interest rates higher for longer.
On the domestic economic front, investors looked ahead to the release of producer price and consumer price inflation data later in the week, and both measures of inflation are expected to show the continuation of the deflation trend.
China Stock Movers
The Hang Seng index declined 1% to 19,239.70, and the mainland-focused CSI 300 index fell 0.7% to 3,768.35.
Technology stocks declined for the second consecutive session after the U.S. expanded its list of Chinese companies deemed as military entities.
Tencent Holdings Ltd. decreased 2.3% to HK $370.80, Baidu Inc. declined 1% to HK $79.60, and Alibaba Group Holding Ltd. fell 0.3% to HK $81.10.
BrainAurora Medical Technology was nearly unchanged at HK $3.25 after the company completed its HK $500 million public offering.
Hong Kong's first public offering in 2025 sold 181 million shares priced at HK $3.22 per share.
- Li Chen
- 08 Jan, 2025
- Hong Kong
Stock market indexes in China and Hong Kong declined amid geopolitical tensions and a weak corporate earnings outlook.
The Hang Seng index dropped 1%, and the mainland-focused CSI 300 index decreased 0.7%, as investors reacted to the sharp decline in Wall Street indexes in overnight trading.
The Hang Seng index extended losses for the third week in a row and wiped out most of the gains in the final quarter of 2024 after policymakers announced a raft of stimulus measures.
However, market enthusiasm has waned in the last five weeks of trading as policymakers failed to follow through with specific stimulus implementation steps.
The Hang Seng has dropped more than 15% from the peak of 23,077 reached on October 7, and traders are bracing for the index to test 17,249, the level before the stimulus announcements.
Moreover, market sentiment was dented after the U.S. service sector continued to grow for the tenth month in a row in December, but inflation expectations also rose amid potential tariffs on imported goods.
The latest service sector strength and inflation expectations confirmed that the Federal Reserve may not need to lower rates in the imminent future, keeping interest rates higher for longer.
On the domestic economic front, investors looked ahead to the release of producer price and consumer price inflation data later in the week, and both measures of inflation are expected to show the continuation of the deflation trend.
China Stock Movers
The Hang Seng index declined 1% to 19,239.70, and the mainland-focused CSI 300 index fell 0.7% to 3,768.35.
Technology stocks declined for the second consecutive session after the U.S. expanded its list of Chinese companies deemed as military entities.
Tencent Holdings Ltd. decreased 2.3% to HK $370.80, Baidu Inc. declined 1% to HK $79.60, and Alibaba Group Holding Ltd. fell 0.3% to HK $81.10.
BrainAurora Medical Technology was nearly unchanged at HK $3.25 after the company completed its HK $500 million public offering.
Hong Kong's first public offering in 2025 sold 181 million shares priced at HK $3.22 per share.