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Wall Street mixed as data points to a labour market slowdown

Apple

Macro Scenes:  

  • Wall Street mixed, tech outperformed:  US stocks continued to be under pressure after November’s rally. However, the growth sectors mostly finished higher, led by Apple, whose shares jumped 2%, reclaiming a US$3 trillion market cap, amid the fourth-quarter sales optimism. The tech rally may have also been led by a slide in the US government bond yields.
  • Government bond yields slid: The US October JOLTS Job Openings fell to 8.73 million, the lowest since March 2021. This strengthened bets for a Fed pivot on hiking rates, sending bond yields down. The data indicates the upcoming November non-farm payroll could show a further slowdown in the labour market.  
  • USD extended gains: The USD index rose to above 104 despite bond yields falling. This might be due to deepened bond yields’ slump in the other major economies. The Australian dollar tumbled nearly 1% against the greenback following the RBA’s dovish pause on rate hikes. The Japanese Yen weakened amid lighter-than-expected Tokyo CPI data for November.
  • Bitcoin topped 43, 000: Bitcoin gained further to above 43,000, which is the highest level since April 2022. The Spot ETF optimism and peaking rate bets continued to fuel the rally.
  • Crude oil deepened losses: Crude oil prices fell for the fourth straight trading day on a firmed USD and deteriorated the Chinese economic outlook.
  • Asian markets to open higher: Chinese stock markets slumped on Tuesday after Moody downgraded its sovereign bonds from stable to negative. The outlook cut is due to rising debts that result from the government’s stimulus measures. The Chinese Yuan also weakened due to the event. The ASX 200 futures rose 0.43%, the Hang Seng Index futures were up 0.24%, and Nikkei futures climbed 0.38%.

Chart of the Day:

Apple, daily – Apple’s shares soared throughout November and approached an all-time high of 197. However, the chart showed potential pullback risk as the stock may have been overbought in the near term. A similar pattern occurred between mid-December 2021 and March 2022 (When the Fed started a rate hiking cycle). This may suggest that the Fed’s rate decision can be critical for the stock market’s further movement at the year-end and into the new year.  

Source: CMC Markets as of 6 December 2023

Company News:   

  • Nio (NYSE: NIO) rose 2.5% after the Chinese EV maker reported narrower-than-expected losses in the third quarter. The company’s loss per share was 2.67 yuan, less than an estimated 2.91 yuan. The revenue came to 19.1 billion Chinese yuan, up 47% year on year, and expect the fourth quarter revenue to be between 16.1 billion yuan and 16.7 billion yuan.
  • Nokia (HEL: NOKIA) fell 5.6% to a three-year low after it lost a major partnership to its Swedish rival Ericsson, who struck a deal with AT&T. The US telecom giant is going to spend US$14 billion over a five-year contract with Ericsson. The project covers an open radio access network in the US.

Today’s Agenda:

  • US ADR Non-Farm Employment Change for November
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