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,Dow Jones Industrial Averagerose more than 120 points or nearly 0.4%,Nasdaq Composite Indexfell nearly 30 points or nearly 0.3%,S&P 500 Indexup nearly 0.2%,Philadelphia SemiconductorThe index rose more than 0.2 percent.
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.
After the report was released,S&P 500 IndexFutures andNasdaq The 100 index futures all rose more than 1%, mainly as signs of cooling wages outweighed the performance of the employment number that exceeded market expectations. Meanwhile, U.S. Treasury yields slipped, with the rate-sensitive two-year yield around 4.4%.dollar indexgo 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 trade to $1.31 per share
Shares of U.S. home furnishing retailer Bed Bath & Beyond fell more than 12% in premarket trading following 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 regarding the company’s bankruptcy and weak fundamentals.
Lululemon(LULU-US) rose 1.91 percent to $332.17 a share in early trade
Shares of activewear brand Lululemon rose nearly 2 percent in premarket trading following 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 trade to $101.88 per share
Shares of U.S. electric car leader Tesla fell more than 6 percent premarket following 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 reported 223,000 in December, 200,000 expected, 256,000 previously revised
- U.S. unemployment rate reported at 3.5% in December, 3.7% expected, 3.6% previously
- The average weekly working hours in the United States in December was 34.3 hours, expected 34.4 hours, and the previous value was 34.4 hours
- U.S. average hourly wages rose 4.6% in December, vs. 5.0% expected and 4.8% previously
- U.S. average hourly wages rose 0.3% in December, compared with 0.4% expected and 0.4% previously
- U.S. December labor force participation rate reported at 62.3%, expected 62.2%, previous value 62.2%
- U.S. November durable goods orders revised monthly rate expected – 2.1%, previous value – 2.1%
- The monthly rate of U.S. factory orders in November is expected to be -0.8%, the previous value was 1%
- The ISM non-manufacturing index in the United States is expected to be 55 in December, and the previous value is 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.
JP Morgan’s latest research shows that nearly two-thirds of US small and medium-sized enterprises predict that the economy will fall into recession. After the Fed has been battling 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.
UBS analysts estimate thatS&P 500 IndexWill be sold off in the second quarter of this year. Analysts wrote in the report that UBS economists predict that the U.S. economy will decline in the second quarter to the fourth quarter of 2023. A race between the impending shocks.