Wall Street drifts lower, ASX set to slide
The November jobs report is due Tuesday, and economists expect it to show employers added 40,000 more jobs than they cut during the month. There will be an update on inflation felt by U.S. consumers on Thursday, and economists expect it to show inflation was at 3.1 percent last month; This rate is still higher than households and policymakers expected.
Such data is under the spotlight because the Federal Reserve is trying to figure out whether the bigger problem for the economy is a slowing job market or high inflation. The Fed is in a potentially difficult situation because solving one of these problems by changing interest rates will worsen the other in the short run.
The hope on Wall Street is that the job market will weaken, but only slightly: enough to prompt the Fed to cut interest rates, but not enough to cause a recession to devastate the economy. Wall Street likes lower rates because they can support the economy and investment prices even if it worsens inflation.
“With the Fed still appearing to be focused on labor market weakness rather than inflation, we are likely facing a ‘bad news is good’ scenario for the jobs report,” said Chris Larkin, managing director of trading and investment at Morgan Stanley’s E-Trade.
He said this would mean the market would likely welcome soft numbers “unless the numbers show employment falling off a cliff”.
Loading
The unemployment rate, not the overall job growth figures, will be in the spotlight as the latter is feeling downward pressure due to the decline in migrant workers. Economists expect Tuesday’s report to show the unemployment rate at 4.4 percent, which would keep the unemployment rate near its highest and worst level since 2021.
Before the updates, treasury yields decreased in the bond market. A measure of manufacturing strength in New York state unexpectedly weakened at a time when economists expected growth to continue, a report released early Monday morning said.
The yield on the 10-year Treasury note fell to 4.17 percent from 4.19 percent at the end of Friday.
Elsewhere on Wall Street, iRobot’s shares tumbled 72.7 percent after the Roomba vacuum cleaner maker said shareholders would likely face a full loss after filing for Chapter 11 bankruptcy protection over the weekend. The company reached an agreement with its main contract manufacturer, Picea, to acquire it through a process overseen by the US bankruptcy court.
Following the weak closing in foreign stock markets in Asia, indices rose in Europe.
Indexes fell 1.3 percent in Hong Kong and 0.6 percent in Shanghai after the Chinese government reported a decline in investment in factory equipment, infrastructure and other fixed assets. It’s the latest signal that demand in the world’s second-largest economy remains weak.
Japan’s Nikkei 225 index fell 1.3 percent after the central bank’s quarterly survey of major manufacturers showed a slight improvement in sentiment. This may encourage the Bank of Japan to continue raising interest rates.
access point
The Market Summary newsletter is a summary of the day’s transactions. Let’s each take ittoday afternoon.
