Tech surges on Alphabet's Gemini, NFP in focus
Non-farm payrolls is forecasted to show growth of 180,000 jobs, despite signs of a weakening labor market that emerged earlier this week
Signs of a weakening labor market have emerged, with JOLTS job openings hitting a 2-year low and the ADP non-farm employment change falling short of expectations.
A further deterioration in job market indicators could heighten expectations of the Federal Reserve implementing interest rate cuts, unseen in over two decades.
Chinese exports unexpectedly rose by 0.5% YoY in November, defying predictions of a 1.1% decrease and improving from the 6.4% decline in October.
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US labor market
Investors remained cautious ahead of the non-farm payrolls data set to be released later today. According to market expectations, the NFP data is supposed to increase from 150K in October to 184K in November.
If there are indications of a further deterioration in the job market, it could strengthen expectations that the Federal Reserve will soon initiate a course to lower interest rates from levels not seen in over two decades.
Signs of a weakening labor market has already been evident since the start of the week as the JOLTS job openings hit a 2 year-low and the ADP non-farm employment change missed expectations.
Deutsche Bank suggests that while the rate of job creation is decelerating, there is also a narrowing scope in the variety of jobs being generated. The bank's economists anticipate a 30,000 increase in the headline payrolls number following the resolution of the autoworkers strike.
Chinese exports broke a six-month decline in November, rising by 0.5% compared to the previous year. This exceeded predictions of a 1.1% decrease and marked an improvement from the 6.4% decline in October.
While this suggested some resilience in overseas demand, there were signs of ongoing weakness in domestic demand as imports fell by 0.6% in November, contrary to expectations of a 3.3% increase.
US major indices showed increased volatility overnight, as chip stocks led a rally. Alphabet Inc rose by 5% after introducing its latest AI model, Gemini. The new multi model AI has capabilities in understanding audio, photos, and video.
The Nasdaq saw an uptick of 1.4%, the S&P 500 by almost 1% and the Dow by 0.2%. Investors remained cautious ahead of the key data today that will make it or break it for next year’s Fed expectations.