The non-farm payrolls data was much better than expected, intensifying the debate about when the Federal Reserve will cut interest rates. US stocks fluctuated after opening flat on Friday (5th), with Apple first rising and then falling, extending its four-day streak. deterioration.
The main US stock index closed slightly higher on Friday, but ended a nine-week winning streak. For the week, the Nasdaq closed down 3.3%, while the Dow Jones and S&P fell 0.6% and 1.5% respectively, marking the worst start to the year since 2016.
Data from the US Department of Labor showed that non-farm employment increased by 216,000 people in December last year, exceeding market expectations of 170,000. The previous value was significantly revised down to 173,000. The unemployment rate fell to 3.7%, below market expectations of 3.8% and the same as the previous value. Such hot data reduced traders’ expectations that the Federal Reserve (Fed) would start cutting interest rates as soon as March.
It is worth noting that average hourly earnings increased by 0.4% monthly in December last year, exceeding expectations.
In contrast to the “hawkish” non-agricultural data, the latest data released by the Institute for Supply Management (ISM) on Friday was relatively “dovish”. The US non-manufacturing index fell to 50.6 in December from 52.7 in the previous month, the biggest drop in three months and well below economists’ expectations of 52.6. Although the index is still on the boom 50 line, this is the second-lowest level in a year.
US stocks fell in the first week of 2024, and people began to doubt whether the Federal Reserve was ready to turn. The futures market was expecting the probability that the Federal Reserve would cut interest rates in March has dropped to around 65%. Against this backdrop, US Treasuries started a wave of selling. The 10-year US Treasury yield rose about 5 basis points to 4.04% after rising on Thursday, and has risen 16.67 basis points this week.
US Treasury Secretary Yellen noted on Friday that wage increases are now higher than price increases and that US labor is making progress, which means the Federal Reserve has made a good decision and the economy has see a soft landing. Richmond Fed President Thomas Barkin said on Friday that the likelihood of a revival of economic expansion is no longer that high and as the economy normalizes, the Fed’s interest rate policy should normalize as well.
Looking ahead, new inflation data will be released next week, and the US Consumer Price Index (CPI) report is scheduled for next Thursday, helping to show whether the Fed is making progress further in its efforts to curb inflationary pressures.
The performance of the main US stock indices on Friday (5th):
- The Dow Jones Industrial Average rose 25.77 points, or 0.07%, to close at 37,466.11 points.
- The Nasdaq rose 13.77 points, or 0.09%, to close at 14,524.07 points.
- The S&P 500 index rose 8.56 points, or 0.18%, to close at 4,697.24 points.
- The Philadelphia Semiconductor Index rose 24.63 points, or 0.63%, to close at 3,933.49 points.
- The NYSE FANG index rose +48.76 points, or 0.58%, to close at 8,415.02 points.
Overall, the 11 major S&P sectors ended in the red, with utilities (+0.39%) and financials (+0.37%) leading the gains. Consumer staples suffered the biggest decline (-0.24%) (Photo: finviz) Focus stocks
The five tech kings in the NYSE FANG+ index were mixed. Apple (AAPL-US) fell 0.40%; Alphabet (GOOGL-US) fell 0.48%; Meta (META-US) rose 1.39%; Microsoft (MSFT-US) fell 0.05%; Amazon (AMZN-US) rose 0.46%.
Dow Jones stocks were mixed. UnitedHealth (UNH-US) fell 1.47%; IBM (IBM-US) fell 1.06%; McDonald’s (MCD-US) fell 0.94%; Verizon Communications (VZ-US) rose 2.11%.
Stocks with half the fee received more dividends. Micron (MU-US) rose 0.89%; AMD (AMD-US) rose 1.89%; Broadcom (AVGO-US) rose 0.03%; Qualcomm (QCOM-US) rose 0.41%; NVDA (NVDA-US) rose 2.29%; Applied Materials (AMAT-US) fell 0.21%; Texas Instruments (TXN-US) rose 0.39%.
Among Taiwan stock ADRs, TSMC performed best. TSMC ADR (TSM-US) rose 0.48%; ASE ADR (ASX-US) fell 0.23%; United Microelectronics ADR (UMC-US) fell 0.37%; Chunghwa Telecom ADR (CHT-US) rose 0.18%.
Corporate News
Apple ( AAPL-US ) closed 0.40% lower at $181.18 per share. The New York Times reported, citing sources, that the US Department of Justice’s investigation into Apple has progressed and could file a comprehensive antitrust lawsuit as soon as the first half of this year over the company’s strategy to protect iPhone dominance.
Microsoft slipped 0.05% to $367.75 a share. Since November 17, 2021, the market value of Apple has been higher than that of Microsoft, and since November 22, 2021, the market value of the two companies has not been so close. Microsoft is getting closer to reclaiming the title of the most valuable company in the United States.
TSMC ADR (TSM-US) increased 0.48% to $99.61 a share. Huawei China launched a new laptop “Qingyun L540” last month. Bloomberg News commissioned a Canadian research company to disassemble Qingyun L540 and found that the “Kirin 9006C” processor used inside was packaged by TSMC around the third quarter of 2020. from 5nm wafers. .
Tesla ( TSLA-US ) closed 0.18% lower at $237.49 a share. China’s State Administration for Market Regulation said that due to problems with automatic auxiliary steering and door lock control, Tesla will recall certain Model S and imported Model S models with production dates between August 26, 2014 and December 20, 2023. X , Model 3 and domestic Model 3 and Model Y electric vehicles, a total of 1.6101 million electric vehicles.
Carrefour SA (CRRFY-US) fell 0.8% to $3.7 a share. PepsiCo (PEP-US) fell 1.48% to $168.94 per share. France’s Carrefour announced that it would no longer sell several products from the “Pepsi” group, including Pepsi soda, 7up, etc., because the prices of Pepsi products were too high. “We have been in discussions with Carrefour for several months and will continue to work together in good faith to ensure supply of our products,” said PepsiCo in a statement.
Economic data
- The US reported 216,000 new non-farm jobs in December, compared to 173,000 expected and a previous value of 173,000.
- The US unemployment rate in December was 3.7%, expected to be 3.8%, and the previous value was 3.7%
- The average weekly working hours in the United States in December was 34.3 hours, compared to the expected 34.4 hours, and the previous value of 34.4 hours.
- The annual average hourly wage growth rate in the United States in December was 4.1%, compared to the expected growth rate of 3.9%, and the revised previous value was 4.0%
- The average US hourly wage growth rate in December was 0.4%, which was expected to be 0.3%, and the previous value was 0.4%
- The US labor force participation rate in December reported at 62.5%, 62.8% expected, and 62.8% in the previous month
- The monthly growth rate of US durable goods orders in November was revised up to 5.4%, compared to the previous value of 5.4%
- The monthly growth rate of US factory orders in November was 2.6%, which was expected to be 2.1%, and the previous value was -3.4%.
- The ISM non-manufacturing index in the US in December was 50.6, 52.5 was expected, and the previous value was 52.7
Wall Street Analysis
Lindsay Rosner, analyst at Goldman Sachs Asset Management, said: “Seasonal hiring usually boosts employment data. We expect the employment data to be strong and better than expected, and the results are as expected . This number calls into question the market’s confidence in the March interest rate cut, but we will have three inflation reports between now and the March meeting, and each will be important.”
Adam Crisafulli, founder and president of Vital Knowledge, analyzed: “Strong growth in hourly wages and declining participation rates all indicate that the market is pricing in the Fed’s easing policy, which is well off target.”
“This better-than-expected report gives the Fed enough flexibility to delay a rate cut in early 2024,” said Ian Lyngen, strategist at BMO Capital Markets.
All figures are updated before the closing date, please refer to the actual quote.
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