Wall Street presented a mixed bag Tuesday following the release of new economic data.
The jobs report showed that job openings in the U.S. in October reached the lowest level they’ve been at since nearly three years ago. The data indicates an easing in the labor market, even as activity in the U.S. services sector increased in November.
While the data from the jobs report was “better than expected, meaning that the job market is weaker, but it’s not so weak that it requires maybe a Fed rate cut or a jeopardy of a recession,” according to Paul Nolte, who’s a senior wealth adviser at Murphy & Sylvest.
At the same time, he said the data wasn’t so strong that the Fed likely won’t raise rates again in the future.
As a result, U.S. equities on the S&P 500 dropped a bit on Tuesday, while Treasury yields increased. Many investors seem to be of the mind that the Fed is winding down its campaign of tightening the credit market since inflation has begun to ease.
📈 Nasdaq holds steady amid key econ reports:
📉 Job openings in October: 8.73M vs. views of 9.4M
📈 ISM service index rose to 52.7 from 51.8 in October, slightly above views
📉 10-year yield hits 3-month low👀 Eyes on Friday's jobs report! Your thoughts? 💬 #MarketWatch…
— Investors.com (@IBDinvestors) December 5, 2023
Yet, the bet that the Fed will keep benchmark rates the same when it meets next week is already completely priced into the market.
The FedWatch tool, produced by the CME Group, shows that 65% of investors are pricing in a Fed rate cut of 25 basis points at least during its March meeting, with 89% doing so for May.
After the jobs report was released, tech stocks traded flat after earlier gains. The Dow Jones Industrial Average also dropped about 0.4%.
The report, released by the U.S. Bureau of Labor Statistics, showed that there were 8.73 million job openings in October, a decrease from the 93.5 million openings the month before, and 10.47 million the year before.
This week, ADP will release numbers for private payrolls on Wednesday, which investors are sure to scour for insights into where the Fed might go with interest rates in the near future.
The last report, issued in October, showed that 113,000 jobs were added by private employers that month, with healthcare and education being the leading sectors for job creation.
