US Stocks Fluctuate as Traders Parse Jobs Data: Markets Wrap

(Bloomberg) — US stocks held onto gains as data showing the economy is slowing boosted sentiment and investors awaited minutes of the Federal Reserve’s December policy meeting. 

(Bloomberg) — US stocks held onto gains as data showing the economy is slowing boosted sentiment and investors awaited minutes of the Federal Reserve’s December policy meeting. 

The S&P 500 and the Nasdaq 100 rose after data from the Institute for Supply Management underscored improving supply chain conditions, declining input prices and slower demand. Earlier, stocks had vacillated after job openings data pointed to a resilient labor market, which remains a concern for the Fed.

Apple Inc. and Tesla Inc. shrugged off Tuesday’s steep losses, taking both US equity benchmarks higher on Wednesday. Treasuries pared earlier gains, with the 10-year rate around 3.72% after touching 3.66% earlier. The dollar dropped. 

Investors are gearing up to parse the Fed’s meeting minutes for clues about why the central bank raised its 2023 inflation forecast.  After Wednesday’s job openings data, investors will also be watching the nonfarm payrolls report on Friday, for any signs of possible softening in the labor market. The onslaught of economic data that is releasing this week could stoke day-to-day volatility.

“The tone of the minutes will be sufficiently hawkish as to serve as a reminder that the Fed still has work to do before arriving at terminal,” wrote Ben Jeffery and Ian Lyngen of BMO Capital Markets. 

Minneapolis Fed President Neel Kashkari, who holds a vote on FOMC decisions this year, said the central bank has at least another percentage point of hikes to do this year, even as inflation shows signs of easing. He said this in an essay published Wednesday on Medium.

 

Meanwhile, news of China considering further support for property developers boosted shares in Hong Kong. While China’s about-turn from its Covid Zero policies has been widely cheered by investors, it still raises complicated questions about what it means for monetary policy, global inflation and demand for goods and services. 

A report showing French inflation unexpectedly slowed added to signs of easing price pressure in the euro area. The Stoxx Europe 600 Index saw broad gains.

Key events this week:

  • FOMC meeting minutes, Wednesday
  • Eurozone PPI, Thursday
  • US ADP employment change, initial jobless claims, Thursday
  • China trade, Caixin PMI, Thursday
  • Eurozone retail sales, CPI, consumer confidence, Friday
  • Germany factory orders, Friday
  • US nonfarm payrolls, factory orders, durable goods, Friday

The main markets moves are:

Stocks

  • The S&P 500 rose 1% as of 1:31 p.m. New York time
  • The Nasdaq 100 rose 0.7%
  • The Dow Jones Industrial Average rose 0.6%

Currencies

  • The Bloomberg Dollar Spot Index fell 0.3%
  • The euro rose 0.5% to $1.0598
  • The British pound rose 0.8% to $1.2061
  • The Japanese yen fell 1.2% to 132.55 per dollar

Cryptocurrencies

  • Bitcoin rose 1.6% to $16,922.1
  • Ether rose 4.3% to $1,262.99

Bonds

  • The yield on 10-year Treasuries declined two basis points to 3.72%
  • Germany’s 10-year yield declined 12 basis points to 2.27%
  • Britain’s 10-year yield declined 16 basis points to 3.49%

Commodities

  • West Texas Intermediate crude fell 4.3% to $73.63 a barrel
  • Gold futures rose 0.7% to $1,859.20 an ounce

This story was produced with the assistance of Bloomberg Automation.

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