New York shares fell as November employment fell far short of expectations and concerns over micron mutations persisted.
At the New York Stock Exchange (NYSE) on the 3rd eastern time, the Dow Jones Industrial Average closed at 34,580.08, down 59.71 points by 0.17% from the previous day.
The Standard & Poor’s (S&P) 500 index fell 38.67 points 0.84% to 4,538.43, down 38.67 points from the battlefield, and the Nasdaq index, which focuses on technology stocks, closed at 15,085.47, down 295.85 points 1.92% from the battlefield.
Investors kept an eye on the November employment data, Omicron mutation, and comments from Federal Reserve officials.
U.S. employment in November was less than half of both the previous month and Wall Street estimates, fueling concerns over a slowdown in the economy.
The U.S. Department of Labor reported that nonfarm payroll employment increased by 210,000 in November.
This is well below the market estimate of 573,000 people compiled by the Wall Street Journal.
In October, employment was revised upward from 531,000 to 546,000, and September employment was revised upward from 312,000 to 379,000.
So far this year, the average monthly new employment has been 555,000.
The unemployment rate fell from 4.6% to 4.2%.
Although employment data fell far short of expectations, concerns have grown that the Federal Reserve (Fed) will speed up the tapering as previously noted as unemployment fell and labor force participation improved to 61.8%.
This is because if supply chain issues persist with the omicron mutation, inflation concerns could persist, allowing the Fed to focus on containing inflation rather than promoting employment.
Louis Federal Reserve Bank President James Bullard said the Fed may want to speed up the tapering.
In a speech to the Missouri Bankers Association, Bullard said: “At a time when economic activity is generally robust, US inflation rose astonishingly in 2021. It suggests that we will consider doing it quickly.”
If inflationary pressures rise in a sluggish economy, concerns about stagflation increase, but other economic indicators remain solid.
The service industry in the US continued to expand for the 18th consecutive month, with the service index hitting an all-time high in November.
The Association for Supply Management (ISM) announced that the Purchasing Managers’ Index (PMI) for the service sector (non-manufacturing) for November was 69.1.
It not only beat the previous high of 66.7, but also beat the Wall Street Journal’s (WSJ) analyst’s estimate of 65.0.
Continuing uncertainty over micron mutations is also a burden on the market.
The World Health Organization (WHO) said that 38 countries around the world were infected with the new mutant Omicron, an increase in 23 countries two weeks ago, suggesting that it is much more contagious than the delta mutation.
In the United States, the number of confirmed cases of Omicron is also showing signs of spreading, with the number of confirmed cases of Omicron increasing to at least 10 in six states.
There was also a report that the U.S. Food and Drug Administration (FDA) would quickly review Omicron-compatible vaccines and treatments if necessary.
The Wall Street Journal reported that the FDA recently met with pharmaceutical officials to establish guidelines on the research and data needed for the rapid evaluation of new vaccine products targeting the omicron mutation.
American pharmaceutical company Moderna has developed a booster shot (third dose) that responds to Omicron and predicted that it will enter clinical trials and approval procedures as early as March next year.
Travel and aviation stocks fell on fears that economic activity could contract again if COVID-19 spreads again.
Shares of Las Vegas Sands fell more than 3%, and shares of Delta Air Lines fell more than 1%.
Shares of Norwegian Cruises are down more than 4%, and shares of Carnival are down more than 3%.
Chinese ride-hailing company Didi Chuxing fell more than 20% on news of delisting.
Shares of US electronic signature company DocuSign plunged more than 40% on the 4Q earnings forecast, which fell short of market expectations.
Shares of Tesla and Zoom Video also fell more than 6% and 4%, respectively.
By sector, consumer discretionary, technology, finance and energy stocks fell, while consumer staples and utilities rose.
Analysts in the New York Stock Exchange have predicted that the stock market will remain volatile for the time being.
“What we are seeing in the market this week after hearing the news of Omicron is extremely high volatility and extremely high tension,” said Karsten Bruzeski, head of macro research at ING, for more information about Omicron. He said this will continue until it comes out.
“The high uncertainty surrounding Omicron and the disappointing employment figures, combined with disappointing employment figures, appear to have driven investors to toss the stock ahead of the weekend,” LPL Financial chief market strategist Ryan Detrick told CNBC.
According to the Chicago Mercantile Exchange (CME) FedWatch, the Federal Funds (FF) interest rate futures market has reflected a 44.5% chance of a rate hike in June next year.
We also factored in the possibility of a second rate hike at 21.3%.
On the Chicago Board Options Exchange (CBOE), the Volatility Index (VIX) rose 2.72 points, or 9.73%, to 30.67.
(Photo = Getty Images Korea)