Weak Start to the Year, Jobs Strong, Yields Surge -Jan 5 Market Recap
Indices
- Dow 37,466, -222 or -0.59%.
- Nasdaq 14,524, -487 or -3.25%.
- MSCI EAFE 2207.74, -28.42 or -1.27%.
- S&P 4,697, -73 or -1.52%.
- USD10Y 4.042%, +16.1bp or +4.15%.
- WTI Crude $73.81/bbl, +$2.15 or +3.00%.
Weak Start to the Year, Jobs Strong, Yields Surge
The markets started the year on a down note during a shortened trading week. Manufacturing was weaker month over month, demonstrating the continuing challenges in that sector. The JOLTS report was also weaker than expected and gave the markets concern regarding the strength of the economy. Those fears were only furthered when the Services surveys came in sharply weaker month over month. However, the weakening economy theory along with anticipated rate cuts in March were put on hold when the December jobs report demonstrated continued resiliency in the labor markets. The inflation data this coming week will be a crucial inflection point for the markets and how they trade for the balance of the month and perhaps the year.
Next Week
More inflation data in the form of the Consumer Price Index (CPI) and the Producer Price Index (PPI) is on tap this week. Earnings kick off in earnest with the major banks reporting on Friday.
Economic Calendar
- Monday – N/A. Earnings: N/A.
- Tuesday – N/A. Earnings: Albertson’s (ACI).
- Wednesday – N/A. Earnings: KB Home (KBH)
- Thursday – Initial Jobless Claims, December Consumer Price Index (CPI). Earnings: N/A.
- Friday – December Producer Price Index (PPI). Earnings: Delta Air Lines (DAL), Wells Fargo (WFC), Bank America (BAC), Blackrock (BRK), Citigroup (C), JP Morgan Chase (JPM).
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Jan 5 Daily Trading Recap…
Monday – Markets Closed in Observance of New Year.
Tuesday – Dow +26 to 37,714, Nasdaq -247 to 14,765, S&P -28 to 4,742, USD10Y +4.1bp to 3.922%.
- December U.S. Final S&P Manufacturing was 47.9 vs 48.2 last month.
Wednesday – Dow -284 to 37,430, Nasdaq -173 to 14,592, S&P -38 to 4,704, USD10Y -1.5bp to 3.907%.
- Eight of eleven S&P sectors traded down today, led lower by Real Estate, Consumer Discretionary, and Industrials.
- November Job Openings and Labor Turnover Survey showed 8.8 million openings, unchanged from October.
- December ISM Manufacturing was 47.4% vs 47.2% expected and vs 46.7% last month.
Thursday – Dow +10 to 37,440, Nasdaq -82 to 14,510, S&P -16 to 4,688, USD10Y +8.4bp to 3.991%.
- Eight of eleven S&P sectors traded down today, led lower by Energy, Consumer Discretionary, and Communication Services.
- Jobless claims were 202,000, vs 216,000 forecast and vs. last week’s slightly revised higher print of 220,000 (originally 218,000).
- December ADP Private Payrolls were 164,000 vs 130,000 expected and 101,000 last month.
- December U.S. Final S&P Services Index was 51.4 vs 51.3 expected and 51.3 last month.
Friday – Dow +25 to 37,466, Nasdaq +13 to 14,524, S&P +8 to 4,697, USD10Y +5.1bp to 4.042%.
- Eight of eleven S&P sectors traded higher, led by Financials, Utilities, and Communication Services.
- December Non-Farm Payrolls were better than expected at 216,000 vs 170,000 expected and vs 173,000 last month.
- The December U.S. Unemployment rate was unchanged at 3.7% vs 3.8% expected.
- December hourly wages were unchanged at +0.4% vs +0.3% expected.
- The December ISM Services Index fell sharply to 50.6% vs 52.5 expected and 52.7 last month.
If you know of any friends or family members who could benefit from our services and these types of communiques during these unique times, we are accepting new clients and offer a complimentary one-hour review.
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