Major Market Trends and Developments
On Thursday, major indices showed minimal movement, closing lower ahead of the highly anticipated November nonfarm payrolls report. Despite this, the S&P 500 reached another intraday high, supported by strength in consumer discretionary stocks, particularly airlines, driven by optimism about the economy. The day’s headline was Bitcoin surpassing $100,000 for the first time, reflecting strong demand for high-volatility, high-beta assets.
Equity exchange-traded funds recorded their largest inflows in three years, and investor exposure to equities is at its highest since 2021. However, concerns about the rally’s sustainability persist due to narrowing market breadth, with only 59% of S&P 500 shares above their 50-day moving averages, down from 75% a few weeks ago.
Nonfarm Payrolls Expectations : Anticipated Job Market Recovery
The release of today’s nonfarm payrolls report is pivotal. Analysts predict robust job growth of 218,000, rebounding from October’s weather and strike-affected 12,000. The unemployment rate is expected to remain steady at 4.1%, while average hourly earnings are forecast to rise by 0.3% month-over-month.
The market continues to see signs of narrowing participation, though consumer discretionary and financial shares lead the rally, bolstered by confidence in economic growth extending into 2025. Meanwhile, technology and communication sectors have lagged as risk-on sentiment eases.
Regional Market Highlights : Global Market Movements
- Asian Markets: Most Asian equities fell on Friday, mirroring Wall Street losses, with South Korea pressured by ongoing political unrest. Conversely, Chinese shares rose sharply, driven by hopes for economic stimulus ahead of a key policy meeting.
- European Markets: European stocks are expected to open lower, with Euro Stoxx 50 futures down 0.4%, while Thursday’s trading saw the index gaining 0.5%, led by banking and travel stocks.
- U.S. Markets: U.S. equity futures traded slightly lower as markets approached key data releases. Post-market gains were recorded for Ulta Beauty, GitLab, and DocuSign, driven by stronger-than-expected earnings.
Commodities and Currency Update
Oil, Currencies, and Yields
- Oil Prices: Slightly lower in Asian trade, reflecting a mixed weekly performance amid concerns over demand despite OPEC+ extending supply cuts until 2025.
- U.S. Dollar: Traded below 106 on Friday, losing ground against most major currencies but strengthening against the Australian dollar.
- Treasury Yields: The 10-year U.S. Treasury yield held steady around 4.18% as investors awaited the November jobs report, which could impact Federal Reserve rate decisions.
Bitcoin’s Surge : Milestone for Cryptocurrency
The day’s headline was Bitcoin surpassing $100,000 for the first time on Thursday, supported by optimism around pro-crypto regulations under President-elect Donald Trump and the appointment of Paul Atkins to lead the SEC. Jerome Powell’s comparison of Bitcoin to gold further boosted its appeal as a speculative asset.
Key Stock Movements
- Airlines: Positive outlooks lifted American Airlines (+17%), Delta (+2.35%), and United Airlines (+3.21%), while Southwest also saw gains.
- Lululemon: Shares climbed 9.2% after raising full-year revenue and earnings forecasts and approving a $1 billion equity repurchase program.
- Ulta Beauty: Surged 12% after increasing its annual profit forecast, driven by demand for perfumes and makeup.
- Tesla: Gained 3.2%, nearing a key level last seen in April 2022, as the company shared more details about its robotaxi plans.
- DocuSign: Shares rose 14.6% after strong third-quarter earnings and optimistic guidance.
- Uber and Lyft: Declined by around 10%, following Waymo’s announcement to expand autonomous ride-hailing services to Miami in 2025.
Upcoming Economic Indicators : Key Data and Reports to Watch
Markets are focused on the upcoming U.S. nonfarm payrolls report. These data, along with inflation expectations, are expected to provide critical insights into jobs growth, wage trends, and overall economic sentiment.
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