Market Considerations and Analytics
Key Notes
Technology and energy stocks helped the S&P 500 advance on Thursday, but a spike in weekly jobless claims signaled the jobs market was decelerating.
The benchmark index on Wall Street has lost 3.6% in the last five sessions as a result of anticipation for a prolonged rate-hike cycle and pessimistic assessments of the economy from a number of top business executives.
Investors found little solace on Thursday, though, after statistics revealed that the number of Americans requesting unemployment benefits grew slightly the previous week while unemployment rolls reached a 10-month peak at the end of November.
The Fed’s decision to scale back its aggressive rate hikes is based on just one data point, yet December’s 50 basis point increase remains unchanged (rate hike). The data between December and February will be crucial in determining what they’ll do subsequently.
The revelation comes in the wake of statistics released last Friday that showed U.S. firms hiked pay and recruited more workers than anticipated in November, raising concerns that the Fed might maintain its tough posture in its fight against decades-high rising prices.
Prior to the Fed’s policy announcement on December 14, attention will be focused on the producer pricing index, the consumer sentiment index from the University of Michigan on Friday, and the consumer pricing information from November the following week.
Investors estimate that the design measures rate will increase by 50 basis points to 4.25–4.50%, culminating at 4.94% in May 2023, with a 91% chance that this will happen.
In the quickest increases since the 1980s, the U.S. central bank increased its benchmark rate by 375 percentage points on in the year.
Chief executives of significant U.S. financial organizations, including JPMorgan (NYSE: JPM), BlackRock (NYSE: BLK), and Citi, have predicted that a recession is likely to occur in 2023 as a result of this aggressive posture.
The yield curve between 2-year and 10-year Treasury notes has also expanded recently, which has increased anxieties.
By 10:43 a.m. ET, the Nasdaq Composite has been higher 130.60 points, or 1.19%, at 11,089.15, the S&P 500 was higher 32.12 points, or 0.82%, and the Dow Jones Industrial Average was higher 241.67 points, or 0.72%, at 33,839.59.
Ten of the main S&P 500 sector indices increased, with technology companies leading the way with a 1.5% rise.
Energy stock prices increased 0.6% as oil prices increased as a result of China’s anti-COVID regulations being relaxed and some Russian oil tanker delays. [O/R]
The majority of large-cap technology and growth firms, including Apple Inc. (NASDAQ: AAPL), Nvidia Corp., and Amazon.com (NASDAQ: AMZN), increased by 1.4% to 4.2%.
On the NYSE, advancers exceeded decliners by a ratio of 3.36 to 1. On the Nasdaq, advancers outweighed decliners by a ratio of 2.67 to 1.
The Nasdaq posted 53 time high and 132 new lows, compared to the S&P index’s 11 new 52-week peak levels and two new low points.
