12:05pm: S&P 500 set to snap 5-week win streak
US stocks were flat in noon trading on stronger-than-expected November jobs data as consumer inflation expectations fell.
At midday, the Dow rose 11 points to 36,128, while the S&P 500 eased a single point at 4,584 and the tech-heavy Nasdaq slipped 2 points to 14,338.
“Those arguing for a soft-landing have the evidence to support them today, the only caveat being the economy may not be coming in for a landing at all, as it is still up in the air flying high,” FwdBonds chief economist Christopher Rupke said.
Notable movers included shares of Carrier Global Corp, which rose 4% after the air conditioner maker said it would sell its Global Access Solutions Business to Honeywell (NYSE:HON) for $4.95 billion in cash.
9:40am: US markets edge lower after robust jobs report
US markets opened modestly lower after a strong jobs report although economists remain of the view that interest rates will be cut in the first half of 2024.
Shortly after the opening bell, the Dow Jones Industrial Average was down 8.48 points at 36,108.90, the S&P 500 was down 5.06 points, 0.1% at 4,580.53 and the Nasdaq fell 50.30 points, 0.4%, at 14,289.70.
Paul Ashworth, chief North America economist at Capital Economics explained the 199,000 increase in November’s payroll included 47,000 workers returning from strikes – 30,000 UAW members and 17,000 SAG Aftra members.
Stripping out that one-off boost, the 152,000 gain was roughly the same as the muted increase in October with 49,000 of that total government jobs and a further 77,000 in health care.
He said excluding those non-cyclical sectors, the economy added only 26,000 jobs, which adds to the evidence that, after a very strong third quarter, growth is slowing to a crawl in the fourth quarter.
Trend employment growth, particularly in cyclical sectors, continues to weaken, but there are few signs of any labour market capitulation, he said.
“We expect the economy to narrowly avoid a recession. But, with core inflation rapidly normalising, the Fed will pivot to rate cuts next spring,” he added.
Ian Shepherdson at Panthen Macccroeconomics said the report “won’t change the Fed’s decision next week; they’re done with raising rates.”
“But the dip in the unemployment rate makes it even more likely that Chair Powell will resist pressure to abandon his view that the Fed is prepared to hike again if necessary.”
“And he will again push back on the idea that the Fed will be easing soon, though we remain of the view that they will start cutting rates by May at the latest,” Shepherdson felt.
8:44am: Stock futures fall after strong jobs report
US stocks futures have slipped after a stronger-than-expected jobs report which showed the labour market remain robust despite high interest rates.
The US economy added 199,000 jobs in November, ahead of consensus expectations for a rise of 180,000, while the unemployment rate edged down to 3.7% compared to the 3.9% forecast, figures released showed.
The US Bureau of Labor Statistics reported job gains occurred in health care and government, and employment also increased in manufacturing, reflecting the return of workers from recent strikes.
Employment in retail trade declined.
The figure for October remained at 150,000 but September’s total was revised down by 35,000, from 297,000 to 262,000.
Average hourly earnings rose by 12 cents, or 0.4% percent, in November from October taking the increase over the past 12 months 4.0%.
Economists had predicted a 0.3% monthly increase.
7:00am: Stock futures flat ahead of US jobs report
US futures suggest a subdued start to trading in New York but that could all change with the US jobs report to come before the opening bell.
In pre-market trading, futures for the Dow Jones Industrial Average were flat, while those for the S&P 500 were down 0.1% and contracts for the Nasdaq 100 futures declined 0.2%.
The US economy is expected to have added 180,000 jobs in November, up from 150,000 in October, although other indicators this week have pointed to a softening jobs market.
“The fact that the data released earlier this week hinted at a clear loosening in the US jobs market makes many investors think that today’s official data will also follow the loosening trend. If the data is soft enough, the rally in the US bonds could continue,” said Ipek Ozkardeskaya at Swissquote Bank.
ING explained payrolls day is usually “pivotal,” with this one “more than most.”
It pointed out that average payrolls in the past few decades have been 130,000 per month and anything below these numbers would be “weak”, as it would begin to signal a growth recession.
“Whatever happens, it will set the scene for the week ahead,” ING said, noting the Federal reserve meeting next week.
Goldman Sachs (NYSE:GS) has taken a more bullish view than consensus estimating non-farm payrolls will rise by 238,000 in November, above consensus and reflecting a 200,000 underlying gain plus a 38,000 boost from the return of striking workers after the end of the United Auto Workers and Screen Actors Guild strikes.