Shares fall after mixed employment report in December

Stocks edged lower on Friday morning as investors digested a key report on the recovery in the US labor market at the end of a volatile week. The S&P 500, the Dow and the Nasdaq fell.

Investors reflected on the Labor Department’s December employment report released Friday morning, providing an update on the extent to which labor shortages were still impacting the economy at the end of Last year. A disappointing 199,000 jobs returned in December, slowing unexpectedly from the previous month. Other measures, however, were more optimistic, as the unemployment rate improved to a new low of 3.9% during a pandemic and the labor force participation rate stabilized after a decline. upward revision in November. Still, many economists have warned that a more recent hit in the labor market from the surge in Omicron cases may not yet have been. included in the December report.

As that print neared, US stocks have come under pressure over the past two sessions as investors reassess the Federal Reserve’s likely next steps. As policymakers watch closely for signs the economy has peaked at jobs, the jobs report could provide additional fodder for the Fed to double its more hawkish tilt, some experts have said.

“It’s a green light for March,” wrote Neil Dutta, head of the US economy at Renaissance Macro Research on Friday morning, referring to the timing of a first Fed rate hike. “U3 unemployment rate plunged 0.3ppt [percentage points] at 3.9%, 0.4 ppt below the Fed’s estimate for the fourth quarter of 2021 and just 0.4 ppt above the Fed’s estimate for the end of 2022. The Average hourly wages are maintained because the rate of participation in the labor market remains stable. ”

The minutes of the December Fed meeting released earlier this week suggested that some officials were inclined to accelerate the reduction of their asset purchases and to push back the timing of a first interest rate hike relative to current levels close to zero. And in a development surprising to many market participants, some officials have also suggested that they plan to start reducing the nearly $ 9 trillion in assets on the central bank’s balance sheet. Such a move would quickly move markets away from the accommodative monetary policy environment that helped support risky assets during the pandemic.

“The way I see it is very simple: The Fed has delivered a wonderful year for the markets in 2021, at the cost of a much more complicated outlook in 2022”, Mohamed El-Erian, president of Queens’ College at the University of Cambridge and Head of Allianz. Economic advisor, told Yahoo Finance Live on Thursday. “And this complicated outlook is for politics, for the economy, and therefore is a more uncertain outlook for the markets.”

“It’s still a very robust economy,” he added. “If we avoid a policy error – great if. But if we avoid a political mistake, this economy has all the ingredients to continue to grow and grow in a more inclusive manner. But we need help with labor market participation and productivity. We need help on the supply side.

And despite this week’s volatility, some pundits have taken a bullish tone about future short-term catalysts for the market.

“In the United States, we are hoping for profits for the fourth quarter. We think [they] should be good enough, ”Rob Haworth, senior investment strategist at US Bank Wealth Management, told Yahoo Finance Live on Thursday. “That said, the market needs to adjust to what is surprising in terms of the Federal Reserve’s aggressiveness in handling the economy around inflation.”

9:31 am ET: Stocks open lower after jobs report

Here are the markets that were trading right after the opening bell on Friday morning:

  • S&P 500 (^ GSPC): -3.36 (-0.07%) to 4,692.69

  • Dow (^ DJI): -84.89 (-0.23%) to 36,151.58

  • Nasdaq (^ IXIC): -15.78 (-0.14%) to 15,059.67

  • Raw (CL = F): $ -0.02 (-0.03%) to $ 79.44 per barrel

  • Gold (CG = F): + $ 3.90 (+ 0.22%) to $ 1,793.10 per ounce

  • 10-year cash flow (^ TNX): +1.7 bps for a yield of 1.75%

7:18 a.m. ET Friday: Stock futures extend gains

Here’s where the markets were trading ahead of the opening bell on Friday morning:

  • S&P 500 Futures Contracts (ES = F): +7.25 points (+0.15%), at 4,694.75

  • Dow Futures (YM = F): +3 points (+ 0.01%), at 36,126.00

  • Nasdaq Futures (NQ = F): +45.50 points (+ 0.3%) to 15,805.5

  • Raw (CL = F): + $ 0.51 (+ 0.64%) to $ 79.97 per barrel

  • Gold (CG = F): + $ 2.80 (+ 0.16%) to $ 1,792.00 per ounce

  • 10-year cash flow (^ TNX): -0.6 bps for a yield of 1.727%

6:31 p.m. ET Thursday: Stock futures drift ahead of jobs report

Here are the main market movements during the night session:

  • S&P 500 Futures Contracts (ES = F): +9.5 points (+ 0.2%), at 4,697.00

  • Dow Futures (YM = F): +57 points (+ 0.16%), at 36,180.00

  • Nasdaq Futures (NQ = F): +45.25 points (+ 0.29%) at 15,804.25

Photo by: NDZ / STAR MAX / IPx 2021 12/30/21 People walk past the New York Stock Exchange (NYSE) on Wall Street on December 30, 2021 in New York City.

Emily McCormick is a reporter for Yahoo Finance. Follow her on twitter

Comments are closed.