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Wall Street Today | US Stocks Slip as Investors Await Jobs Report

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Moomoo Recap US wrote a column · Dec 6, 2023 15:41
Wall Street Today | US Stocks Slip as Investors Await Jobs Report
RECAP
US stocks fell as investors await confirmation that the job market is cooling enough to convince policymakers that inflationary pressures are easing, strengthening the case for lower interest rates next year.
The $S&P 500 Index(.SPX.US)$ slipped 0.4% to 4,549.34 while $Nasdaq Composite Index(.IXIC.US)$ declined 0.6% to 14,146.71. The $Dow Jones Industrial Average(.DJI.US)$ fell 0.2% to 36,054.43.
ADP released data Wednesday showing private employers added less jobs than expected in November while wages rose at the slowest pace in more than two years. The report came a day after the Bureau of Labor Statistics said job openings declined to 8.7 million at the end of October, the lowest in more than two years. On Thursday, the government will release the weekly jobless claims data, followed by the employment report a day later. The state of the job market could help gauge wage pressures on inflation and may guide Fed officials as they provide their rate forecasts for next year.
The November rally in stocks were predicated on expectations that the Fed will cut interest rates next year. The CME Fedwatch Tool is signaling a 31% chance that the target rate will be cut by 1 percentage point to a range of 4% to 4.25% by December 2024.
Source: CME website
Source: CME website
MACRO
Jobs Growth, Wage Gains Slow
Private employers added 103,000 jobs in November, ADP data released Wednesday showed. That follows a downwardly revised 106,000 added in October and is below the 130,000 jobs gain expected in estimates compiled by Bloomberg.  
Wage gains are also cooling, easing pressure on inflation. Those who stayed with their jobs saw an annual pay raise of 5.6%, the slowest pace since September 2021, ADP said. The trend is the same for job changers, with pay growth at 8.3%, the smallest increase since June 2021, data showed. The premium for those switching jobs is at the smallest in three years of data, it said.
Meanwhile, mortgage applications increased last week as the 30-year fixed-rate mortgage fell to 7.17%, the lowest level since August, the Mortgage Bankers Association said.
SECTORS
Oil Below $70, Gold Rebounds
Oil prices fell below $70 a barrel for the first time since early July as Saudi Arabia cut its official selling prices to Asia by the most since February, signaling market weakness. Demand concerns overshadowed data released by the US Energy Information Administration showing a 4.6-million-barrel decline in the nation’s commercial crude oil inventories.
Gold rebounded after two straight sessions of declines, settling less than $25 below its all-time closing price, as investors await the November jobs report that’s closely watched by the US Federal Open Market Committee that will decide the path of interest rates in the world’s largest economy.
Wall Street Today | US Stocks Slip as Investors Await Jobs Report
COMPANIES
Biggest Gainer on S&P 500
$Campbell Soup(CPB.US)$ shares advanced 7%, making the stock the biggest gainer on the S&P 500 after the company reported fiscal first quarter adjusted earnings that beat estimates.
The company also said it continues to expect 2024 adjusted earnings per share to reach $3.09 to $3.15. That's higher than the $3.07 expected by analysts polled by Capital IQ, according to MT Newswires.
Biggest Loser
$Brown-Forman-B(BF.B.US)$ shares fell as much as 11.6% on Wednesday after the parent to Jack Daniel's whiskey posted weaker-than-expected fiscal second-quarter earnings and flagged challenging operating environment that tempered its expectations for fiscal 2024. The stock closed down 10.4% at $53.98, the biggest decliner on the S&P 500 Wednesday
British American Tobacco's $31.5B Charge
$British American Tobacco(BTI.US)$ saw its shares fall as much as 10% after the company said it’s taking a $31.5 billion non-cash adjusting impairment charge related to some of its US combustible brands. The stock touched a new 52-low week of $28.35 before trading at $28.85, down 8.5% in US trading. That took this year's slump to 28%.
Source: Bloomberg, Dow Jones, CNBC, Reuters
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