Market participants weren't sure what to think of Friday's stronger-than-anticipated jobs report. Indeed, stocks traded in both positive and negative territory today as investors weighed the results against expectations for the Fed's timeline for potential interest rate cuts in 2024.
The Bureau of Labor Statistics this morning said the U.S. added 199,000 new jobs in November, more than the 185,000 economists were expecting. Employment figures for September were revised lower while October's figure was unchanged.
The November jobs report also showed the unemployment rate fell to 3.7% from the previous reading of 3.9%. Additionally, wage growth – a key measure of inflation – slowed in November, to 4.0% annually vs October's 4.1% increase.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
"The Fed should be encouraged by the continued, though slight, moderation in the year-over-year increase in wages and the bounce back up in the labor force participation rate," says Greg Wilensky, head of U.S. fixed income at Janus Henderson Investors. "However, the recent data will likely leave the Fed thinking that policy rates are unlikely to be cut as quickly in 2024 as the market has recently been pricing so it may be a case of 'higher than the market expects.'"
According to CME Group, futures traders are now pricing in a 44% chance for a quarter-point rate cut in March – down from 55% one day ago. The probability for one in May jumped to 50% from yesterday's reading of 42%.
Is Apple ramping up iPhone production in India?
In single-stock news, Apple (AAPL) rose 0.7% after a Wall Street Journal report indicated the tech giant and its suppliers are targeting annual production of more than 50 million iPhones in India by 2026. This new target will only represent about a quarter of total iPhone production, with the majority still occurring in China.
Apple's efforts to diversify its supply chain come after the company "has faced challenges in China this year beyond trade tensions with the U.S., including the Chinese government instructing some officials not to use iPhones at work," the article says. Still, China remains a major market for Apple, accounting for nearly 17% of total sales in its fiscal fourth quarter.
Red-hot mortgage rates weigh on RH results
Elsewhere, RH (RH), the company formerly known as Restoration Hardware, fell 14.0% after the home goods retailer reported earnings. In its third quarter, the company swung to a per-share loss of 42 cents vs a year-ago profit of $4.26 per share. Revenue fell 14% to $751 million.
RH said mortgage rates that peaked above 8% in October created headwinds during the three-month period. "With 82% of homeowners having mortgages below 5%, and 62% below 4%, we continue to expect the existing housing market to remain frozen until interest rates and/or home prices fall meaningfully," CEO Gary Friedman wrote in the shareholder letter. As a result, the company narrowed its full-year guidance.
The new outlook suggests "revenue will fall by about 14% for fiscal 2024," says CFRA Research analyst Arun Sundaram (Hold). "Demand trends are expected to improve in the first half of calendar year 2024, driven by new product launches, improved in-stock levels, gallery resets, and of course, easier year-over-year comparisons." Potential rate cuts could also be a positive catalyst for the consumer discretionary stock, Sundaram adds.
As for the major indexes, the Dow Jones Industrial Average added 0.4% to 36,247, the S&P 500 rose 0.4% to 4,604, and the Nasdaq Composite gained 0.5% to 14,403. All three indexes extended their weekly win streaks to six.
Related content
- Comcast To Hike Prices By 3% Next Year
- The Earnings Recession Is Over
- The Wash Sale Rule: Six Things You Need to Know
-
Don't Waste Your Money on Bad Gifts. Try This Instead.Holiday Happiness These strategies, backed by behavioral finance, can help you find presents that your loved ones will truly enjoy.
-
5 Unique Book-Inspired Trips Across AmericaThere are five great trips to take across America that can immerse you in the culture of your favourite books.
-
Dow Soars 493 Points in Fed-Fueled Bounce: Stock Market TodayNew York Fed President John Williams struck a dovish tone Friday, which eased Wall Street's worries over a potential December pause.
-
Dow Erases 717-Point Gain to End Lower: Stock Market TodayThe main indexes started the day with solid gains, but worries of an AI bubble weighed on stocks into the close.
-
S&P 500 Snaps Losing Streak Ahead of Nvidia Earnings: Stock Market TodayThe Dow Jones Industrial Average also closed higher for the first time in five days, while the Nasdaq Composite notched a win too.
-
Dow Trims Its Loss to 498 Points: Stock Market TodayMarkets are wondering more and more about returns on the enormous amounts of capital hyperscalers are investing in AI.
-
Dow Falls 557 Points to Start NVDA Week: Stock Market TodayThe Oracle of Omaha saw growth and value in certain corners of the stock market during the third quarter.
-
Investors Buy the Nasdaq's Big Dip: Stock Market TodayStocks are up and down again to end an up-and-down week ahead of big earnings announcements and the eventual return of regular economic data flow.
-
Dow Dives 797 Points as Government Opens: Stock Market TodayThe process of pricing and re-pricing realities old and new never stops, and next week promises to be at least as exciting as this week.
-
Dow Climbs 327 Points, Crosses 48,000: Stock Market TodayMarkets are pricing the end of the longest government shutdown in history – and another solid set of quarterly earnings.
