Daily Market Color

Dow Hits 25K Ahead of Nonfarm Payrolls

Market Barriers Broken

Even though the outside of the New York Stock Exchange was cold and snowy due to a bombogenesis snow storm continuing to cause havoc along the Eastern Seaboard, the inside of the exchange was heating up as US stocks continued their hot streak, in line with gains in equities worldwide.  While the biggest headline was the Dow passing 25,000 for the first time in history, all three major US stock indices were up on the day: DJIA up 0.6% to 25,075.13, S&P closing +0.4% to 2,724.31 and NASDAQ rising 0.2% to 7,077.91.  

After having its first positive day in over a week yesterday, the US dollar could not make it two in a row.  The dollar spot index fell 0.3%, highlighted by a 0.5% decline vs. the euro to a fresh three-year low.  The 10yr Treasury finished the day largely unchanged, after selling off 3 basis points intraday.  In commodities, WTI crude oil futures closed at a new three-year high of over $62/barrel, driven by data from the Energy Information Administration which showed inventories in the US declining by 7.42 million barrels (the most since last summer).

 

 

Strong Labor Data Ahead of Nonfarm Payrolls

The ADP national employment report for December was released today, showing 250,00 new hires by private employers in the US, far exceeding expectations of 190,000.  The figure represents a nine-month high and is a significant uptick from November’s downwardly revised level of 185,000. Steady employment gains were observed across most major industries, with payrolls in trade (retailers) and professional services leading the way during the holiday season.  Often a leading indicator for the Labor Department’s more comprehensive employment report, today’s ADP figure foreshadows steady gains in tomorrow’s nonfarm payroll figures.  Expectations for the employment report, per Bloomberg, can be found below-

 

 

Other key economic data points released today included a report from the Labor Department which showed a third consecutive week of an increase in initial jobless claims.  The number of new claims for the week ended December 30th increased to a seasonally adjusted 250,000 (240,000 expected), up 3,000 from the previous week’s revised level.  The four-week moving average of claims rose by 3,500 to 241,750, albeit well below the 300,000 threshold associated with a healthy labor market.  Also detailed in the report, the number of continuing claims declined by 37,000 to 1.914 million for the week ended December 23rd.

 

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