The First Slice for Thursday, December 7, 2023

Recently, U.S. stocks experienced a dip, erasing earlier gains as investors anxiously awaited further labor-market data after November’s private-sector job figures fell below expectations. The ADP reported that U.S. businesses added 103,000 new jobs in November, signaling slower hiring and a softer labor market. Although the ADP estimate might not be a precise predictor, the U.S. Bureau of Labor Statistics reports suggest a deteriorating job market, contributing to concerns among Fed officials and investors.

The Dow Jones Industrial Average finished down by 70.13 points, or 0.2%.
The S&P 500 ended off by 17.84 points, or 0.4%.
The Nasdaq Composite closed down by 83.20 points, or 0.6%.

This slowdown in the labor market could impact the Federal Reserve’s decisions on interest rates. Investors are closely watching for signs that the market’s strong performance in November is justified. The upcoming U.S. employment report is highly anticipated, with economists forecasting 190,000 jobs added in November. Additionally, jobless claims numbers are expected to provide insights into the state of the economy and the effectiveness of higher interest rates in cooling activity.

Despite strong performances in U.S. stocks last month, there is a cautious sentiment as investors assess the potential impact of a slower job market on the economy. The recent decline in the 10-year Treasury yield and the widening U.S. trade deficit further contribute to concerns about slower growth and inflation in the fourth quarter. The possibility of a soft landing allowing the Fed to cut rates sooner than expected in 2024 has supported the rally in equities and bonds, even as some market indicators suggest a more cautious outlook……..[read more]