The U.S. December non-farm payrolls report showed that average hourly wage growth and employment growth slowed down, which is expected to pave the way for the Federal Reserve (Fed) to slow down the pace of interest rate hikes and ease market concerns. day) opened higher.
Before the deadline, the Dow Jones Industrial Index rose by more than 120 points or nearly 0.4%, the Nasdaq Composite Index fell by nearly 30 points or nearly 0.3%, the S&P 500 Index rose by nearly 0.2%, and the Philadelphia Semiconductor Index rose by more than 0.2%.
The U.S. Department of Labor announced on Friday that the number of non-agricultural employment in December last year was 223,000, which was higher than market expectations of 200,000, but lower than the revised previous value of 256,000. The unemployment rate for the month was 3.5%, lower than the market The expected 3.7%, the previous value was revised down to 3.6%. In addition, the growth rate of average hourly earnings slowed last month, which was lower than market expectations.
S&P 500 futures and Nasdaq 100 futures both rose more than 1% after the report, as signs of cooling wages outweighed a stronger-than-expected payrolls. Meanwhile, U.S. Treasury yields slipped, with the rate-sensitive two-year yield around 4.4%, and the dollar index was lower.
While a softening job market is a goal of the Federal Reserve, the Fed is particularly concerned that wage pressures will dampen its efforts to cool inflation, and the latest report that wages are slowing is a market welcome and the Fed will be watching closely.
Before the release of today’s non-agricultural report, ADP’s report, known as “small non-agricultural”, showed that the number of employed people far exceeded expectations. At the same time, the number of people receiving unemployment benefits unexpectedly fell at the beginning of last week. The US job market remains resilient despite the Fed’s rate hikes.
After Atlanta Federal Reserve Bank President Raphael Bostic recently said that the central bank “still has a lot of work to do” in curbing 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 that interest rates are approaching a sufficiently strict range and inflation expectations have fallen. These words brought optimism to investors, but Bullard is no longer a voting member of the Federal Open Market Committee (FOMC) this year.
In addition, Esther George, president of the Federal Reserve Bank of Kansas, who has FOMC voting rights this year, said that he hopes the Fed will continue to work hard to shrink its balance sheet. a period of time. She believes the Fed needs to raise the benchmark interest rate above 5% and maintain it through 2024 until inflation does show signs of starting to fall back toward the Fed’s 2% inflation target. George is seen as one of the hawkish members of the FOMC.
As of 22:00 on Friday (6th) Taipei time: Focus stocks:
Bed Bath & Beyond (BBBY-US) fell 22.49% in early trading to $1.31 per share
Shares of U.S. home furnishing 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 cash. Wall Street investment bank KeyBanc lowered the target price of the stock from $2 per share to $0.1 per share, citing concerns about the company’s bankruptcy and weak fundamentals.
Lululemon (LULU-US) rose 1.91% in early trading to $332.17 per share
Shares of activewear brand Lululemon rose nearly 2 percent in premarket trading after Wells Fargo raised its rating on the stock to “overweight” from “equal weight,” citing Lululemon’s momentum. Strong and attractively priced.
Tesla (TSLA-US) fell 7.67% in early trading to $101.88 per share
Shares of U.S. electric car leader Tesla fell more than 6 percent premarket after the company cut prices for the Model 3 and Model Y in China, a move that sparked expectations of a price war for electric vehicles in the world’s largest auto market as China’s Demand has weakened.
Today’s key economic data: U.S. non-agricultural employment in December reported 223,000, expected 200,000, revised previous value of 256,000 U.S. unemployment rate in December reported 3.5%, expected 3.7%, previous value 3.6% U.S. December The average weekly working hour was 34.3 hours, expected 34.4 hours, and the previous value was 34.4 hours. The average hourly wage growth rate in the United States in December was 4.6%, 5.0% expected, and the previous value was 4.8%. The average hourly wage growth rate in the United States in December was 0.3 %, expected 0.4%, previous value 0.4% U.S. December labor participation rate reported 62.3%, expected 62.2%, previous value 62.2% U.S. November durable goods orders monthly rate revision expected – 2.1%, previous value – 2.1% U.S. 11 Monthly factory orders monthly rate expected – 0.8%, previous value 1% US December ISM non-manufacturing index expected 55, previous value 56.5 Wall Street analysis:
Brent Donnelly, president of Spectra Markets, said that the non-agricultural report revealed signs of a soft landing for the US economy, and that the economy is solid and overheating is not so worrying.
According to the latest research by JP Morgan Chase, nearly two-thirds of US small and medium-sized enterprises predict that the economy will fall into recession. After the Fed has been fighting high inflation for several months, rising operating costs have become the most concerned issue for US companies. According to the survey, 65% of medium-sized companies and 61% of small businesses in the United States expect a recession this year, and most small business leaders said they expect the upward trend in business operating costs to continue.
Analysts at UBS predict that the S&P 500 will sell off in the second quarter of this year. Analysts wrote in the report that UBS economists expect the U.S. economy to decline from the second quarter to the fourth quarter of 2023. A race between the impending shocks.