Dow rises modestly, Nasdaq falls as stocks try to shake off a dismal start to 2024

[ad_1]

U.S. stocks were mixed on Thursday, struggling to shake off a dismal start to the year after Federal Reserve policymakers suspended hopes for early interest rate cuts.

In afternoon trading, the Dow Jones Industrial Average (^DJI) rose about 0.3%, while the benchmark S&P 500 (^GSPC) was almost flat. After Wednesday’s decline, the Nasdaq Composite Index (^IXIC) tried to move higher at points during trading, but remained 0.3% below its flatline.

Investors looking for certainty about a March interest rate cut instead got more uncertainty from the Fed’s minutes released Wednesday. Officials agreed that interest rates should peak and be lowered by the end of 2024, but some said they could remain at historically high levels for “some time” depending on the path of inflation. It was a department.

read more: Impact of the Fed’s interest rate hike suspension on bank accounts, CDs, loans, and credit cards

Multiple indicators released Thursday morning showed the labor market remained healthy while wages continued to cool, a welcome sign in the fight against inflation.

According to the latest ADP jobs report, private companies added 164,000 jobs in December, higher than November’s 103,000 and ahead of analysts’ expectations for a 115,000-job gain.

Elsewhere, the Labor Department reported that 202,000 unemployment claims were filed last week, lower than economists’ expectations of 216,000.

Meanwhile, U.S. Treasury yields are back on the rise, with the 10-year Treasury yield (^TNX) nearing 4% after moving away from that level on Wednesday.

live9 updates

Friday, January 5, 2024, 2:05 AM GMT+5:30

thursday trend ticker

QuantumScape Corporation (QS) led the trending ticker page on Yahoo Finance on Thursday. Shares in Volkswagen’s battery subsidiary soared nearly 50% after its solid-state battery passed its first durability test.

Shares of Mobileye Global (MBLY) fell about 25% after the semiconductor maker said it expected first-quarter sales to fall about 50%. The stock had risen nearly 30% in the past two months before the announcement.

Walgreens (WBA) stock fell about 6% after the company released its quarterly results. The company announced a 48% reduction in its dividend from $0.48 to $0.25 per share.

Peloton (PTON) stock soared more than 15% on Thursday after the company announced it would begin a partnership with TikTok to feature short-form fitness videos and other content.
Friday, January 5, 2024, 1:40am (GMT+5:30)

Travel-related stocks rise as oil prices fall

Travel stocks rose on Thursday as oil prices fell, suggesting lower fuel costs for cruise lines and airlines.

American Airlines (AAL), Delta Air Lines (DAL), and United Airlines (UAL) all rose more than 1%. Cruise lines Royal Caribbean (RCL) and Carnival (CCL) rose more than 2%.

Oil futures fell more than 2% in early trading after higher-than-expected U.S. gasoline and distillate fuel production.

Meanwhile, energy stocks were under pressure on Thursday. The S&P 500 Energy Select ETF (XLE) was the worst performing sector, falling more than 1%.

Airlines and cruise ship stocks rise as oil prices fall
Friday, January 5, 2024, 1:09 AM GMT+5:30
Big days ahead for the labor market

Employment data for December is due to be released on Friday morning, and is expected to show signs of further cooling in the labor market towards the end of 2023.

In the U.S. Bureau of Labor Statistics’ monthly labor report scheduled for release at 8:30 a.m. ET, consensus estimates show that nonfarm payrolls rose by 175,000 in December, with an unemployment rate of 3.8 compared to the previous month. It is expected to increase to %. Compiled by Bloomberg. The US economy added 199,000 jobs in November, and the unemployment rate unexpectedly fell to 3.7%.

Here are the key numbers Wall Street will be watching, according to Bloomberg data:

Non-agricultural employment: +175,000 vs. previously +199,000

Unemployment rate: 3.8% vs. 3.7% previously

Average hourly wage, change from previous month: +0.3% vs. +0.4% previously

Average hourly wage, year-on-year change: +3.9% vs. +4.0% previously

Average working hours per week: 34.4 vs. previous 34.4

Once again, this report will be an important test for the stock market’s year-end rally. The move, which has pushed stocks near all-time highs, has prompted investors to point out that many now believe the Federal Reserve is willing to push inflation back to 2% without completely reducing economic growth. We mainly attribute this to a change in sentiment as we believe we can achieve a soft landing.

“We expect the December jobs report to show slower job growth and further slowing in nominal wage growth, but both “This is something the Federal Reserve wants to assess as it plots a soft landing.” Thursday’s memo.
Friday, January 5, 2024, 12:00 AM GMT+5:30

Crude oil falls as gasoline inventories indicate weak demand

Oil prices reversed on Thursday after weekly U.S. gasoline and distillate fuel inventories showed a decline in demand.

West Texas Intermediate (CL=F) fell more than 2% following the release of U.S. crude inventory data, but it offset most of its losses. Brent (BZ=F) also sank into negative territory, losing its gains so far.

Gasoline inventories rose by 10.9 million barrels, the largest week-over-week increase in more than 30 years, according to Energy Information Administration data.

Crude oil inventories fell by 5.5 million barrels for the week ending Dec. 29, but the higher-than-expected crude oil inventories may reflect that supplies from the United States made up for shipping disruptions due to tensions in the Red Sea.

Crude oil futures rose more than 1% in early trading, extending gains from Wednesday on concerns about supply disruptions in Libya.
Thursday, January 4, 2024 11:19pm (GMT+5:30)

Decline in mortgage interest rates has stalled

The rapid decline in mortgage interest rates has stalled into 2024.

Yahoo Finance’s Rebeca Chen reports:

The average interest rate on a 30-year loan rose to 6.62% from 6.61% a week ago, according to a Freddie Mac survey on Thursday. Apart from this week’s modest rise, interest rates have been falling for several weeks since late October, dropping nearly 117 basis points from a 12-month high of 7.79% at the end of October.

While these recent declines in homebuyers’ ability to purchase homes have increased homebuyers’ ability to purchase homes, continued supply shortfalls could lead to further Affordability improvements may be suppressed.

“Mortgage rates are expected to decline overall in 2024, but we do expect some fluctuations in weekly mortgage rates,” Jessica Lautz, deputy chief economist at the National Association of Realtors, told Yahoo Finance. ” he wrote.

“The biggest demand is likely to come from those who have traditionally been priced out of the home buying market, with a steady stream of all-cash home buyers and first-time buyers looking to trickle into the spring.” “There is likely to be competition between the different market share,” Lautz added. .
Thursday, January 4, 2024 9:59 PM GMT+5:30

Bank of America says 2024 is off to a tough start, but earnings could still drive stock gains

Stock prices are off to a tough start in 2024.

The famous Santa Claus rally did not come. The Nasdaq Composite Index (^IXIC) had its fourth-worst start to the new year on record. And the Russell 2000 (^RUT), the darling of recent market gains, is just off to his third-worst two-day start ever.

“It is fair to say that financial markets started 2024 with something of a mild hangover,” Jonas Goltermann, deputy chief market economist at Capital Economics, said in a research note on Wednesday.

But some on Wall Street believe the current market dynamics are macro-focused. The rally could continue if that sentiment shifts focus to earnings.

Analysts expect full-year earnings growth for S&P 500 companies to be 11.7%, which would be higher than the 10-year average annual earnings growth rate of 8.4%, according to recent data from FactSet.

That earnings backdrop is one of the main drivers behind Bank of America’s expectation that the S&P 500 index will grow nearly 10% from current levels, according to BofA equity strategist Ohsung Kwon.

“The earnings season starting next week will be key for the market,” Kwon said.

With the company officially emerging from an earnings recession in the third quarter, Kwon believes it’s important for the bullish case to continue momentum.

“Companies have been cutting costs throughout the revenue downturn,” Kwon said. “They are managing margins. Margins rose for the second consecutive quarter. So given that interest rate pressures and macro uncertainty have eased somewhat, companies are more positive going into this earnings season. I think momentum will pick up if we talk about it. Now, that’s going to be bullish on stocks. ”
Thursday, January 4, 2024 8:03 PM GMT+5:30

Stock prices are unstable as they approach each other

U.S. stocks stalled on Thursday, struggling to shake off a dismal start to the year after Federal Reserve policymakers left hopes of an early interest rate cut.

The Dow Jones Industrial Average (^DJI) rose about 0.2%, while the benchmark S&P 500 (^GSPC) fell about 0.1%. Tech stocks showed signs of returning to Wednesday’s losses, with the Nasdaq Composite Index (^IXIC) down about 0.4%.
Thursday, January 4, 2024 7:31 PM GMT+5:30

Signs of further soft landing in the labor market

Multiple indicators released Thursday morning showed the labor market remained healthy while wages continued to cool, a welcome sign in the fight against inflation.

The latest ADP jobs report showed private sector payrolls rose by 164,000 people in December, higher than November’s 103,000 and ahead of analysts’ expectations for an increase of 115,000.

ADP also revealed in its announcement that the annual wage growth rate fell to 5.4% from 5.6% in the previous month.

“We are returning to a labor market that closely matches pre-pandemic employment conditions,” said Nella Richardson, chief economist at ADP. She said: “While wages did not cause the recent inflation, the risk of a wage-price spiral has all but disappeared now that wage growth has receded.”

Labor Department data showed 202,000 claims for unemployment benefits were filed last week, lower than the 216,000 expected by economists. Unemployment claims are an area several economists told Yahoo Finance are monitoring for signs of an economic slowdown, as rising claims mean more people are being laid off. he said.

Investors are still awaiting this week’s big labor update, with the December jobs report scheduled to be released Friday at 8:30 a.m. ET.
Thursday, January 4, 2024 7:16pm GMT+5:30

Apple downgraded for second time this week

Apple (AAPL) suffered its second downgrade in four days in 2024, this time from Piper Sandler.

Analyst Harsh Kumar’s reasons for the downgrade were similar to those cited by Barclays’ peers earlier this week. That is the demand for iPhones, especially in the Chinese market, which is expected to be sluggish.

Apple stock has already taken a hit this year, falling more than 1% in premarket trading Thursday.

Piper Sandler’s downgrade from “overweight” to “neutral” may not have been as shocking as Barclays’, which downgraded its rating to “underweight” on Tuesday. Apple stock reacted with its biggest decline since September.

The percentage of analysts with a bullish rating on the company’s stock is at its lowest point in three years, according to Bloomberg.