Mid-Week Market Minute 12.6.23

Stocks Flat, Job Openings Lower Than Expected

Global stocks were mostly flat in early trading this week as investors wade through an abundance of economic data. In bonds, prices moved higher once again this week as interest rates continued to make their way lower. For the first time since September, the yield on the 10-year Treasury note briefly dropped below 4.20% on Tuesday as the markets continue to speculate the Federal Reserve’s rate-hiking campaign is complete.

Data on the labor front helped support the case for lower rates, as job openings figures for October came in lower than expected at 8.73 million, well below the consensus estimates of 9.3 million openings. The decline in job openings brought the ratio of job openings to available workers down to 1.3, nearing pre-pandemic levels. This data comes ahead of the more widely followed nonfarm payrolls report due on Friday, where economists expect the U.S. economy to have added 190,000 jobs in November. Federal Reserve officials have taken particular interest in cooling the red-hot labor market as part of their battle against inflation, and recent data suggests the supply-and-demand dynamics may be coming back into balance.

In other economic news, the S&P Global US Composite PMI arrived in line with consensus, showing an economy that is slowly expanding. Meanwhile, the ISM services index for November posted a reading of 52.7%, a full percentage point higher than October and well above forecasts. Looking ahead to next week, the Federal Reserve is set to conclude its two-day policy setting meeting on Wednesday where the markets are widely expecting the FOMC to leave interest rates unchanged at the current target range of 5.25-5.50%. 

Source: GSAM, CNBC, JPMorgan

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