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Managing Wealth Since 2012
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whats happening in the market?
Thursday, January 5th, 2023
Yesterday, 1/4/23, markets ended on a positive note:
DJIA:
S&P 500
NASDAQ:
+0.40%
+0.75%
+0.69%
Market view as of 10am, 1/5/23:
DJIA:
S&P 500
NASDAQ:
-0.85%
-0.88%
-0.97%
FOMC Minutes:
-
0 of the 19 committee members believe it is appropriate to cut interest rates this year
-
17 out of 19 expect the rate to rise above 5%
-
8 members gave a range of 5.25% and 7of them projected a higher interest rate
Meaning: Expect to see that expected 5% through 2023
This morning the market dropped after the following jobs data indicates that the Fed will not stop hiking rates.
-
The ADP Employment Report: In November, it reported a 182,000 increase in new hires; the forecasted report from the WSJ was another increase of 153,000 new hires. However, the report showed 235,000 new hires! Indicating a strong labor market. **
-
The Initial Jobless Claims Report: Decreased from 223,000 to 204,000 a 19,000 decrease compared to the projected 3,000 decreases by the WSJ.
Meaning: Although it is good news fewer people have applied for unemployment, this suggests the economy is still expanding even with high-interest rates. Will the Fed continue to increase rates?
-
The Continuing Jobless Claims decreased by 24,000 to 1.69 Million.
Meaning: For the last week of 2022, more jobs were avaialbe for people to obtain. Posing a similar situation as the Initial Jobless Claims. Good news for people but could mean bad news for the market.
Trade Deficit
This report continues the same previous trend from the last report "People are spending more money on services than products because our imports continue to decrease."
The WSJ averaged polled estimated a shortfall of $63.1 billion, but the report showed a $61.5 billion, a 21% decrease in November.
**ADP is a payroll service that gives us an indicator of hiring trends.
Wednesday, January 4th, 2023
Market view as of 10am, 1/4/23:
DJIA:
S&P 500
NASDAQ:
+0.17%
+0.47%
+0.35%
Economic Reports:
Job openings fell slightly from 10.5 Million to 10.46 Million. A slighter decrease than the forecasted 10 Million and has been decreasing since hitting a peak in March at 11.9 Million. Keep this number in mind as it is paid attention to highly by the Feds.
Meaning: The labor market is holding on strong which sounds like good news but the Feds have noted that "inflation will persist unless a decrease in job openings happens in connection with a slowed down wage increase."
Some good news for the finance and insurance companies: job openings fell by 75,000 That's good news for recruiting and sounds like people are taking an active role in managing their assets.
The Quits Report: This report shows how many people quit in November month over month. The results show an increase from 4.02 to 4.17 Million people.
Meaning: Well this could actually be bad news. Only 1/3 of people decide to quit once they have another job*. Since the month-over-month has been maintained above 4 million, it could seem that it's easier to find another job but the job market is quite competitive and employers have found wages will need to increase to accommodate that and inflation.
Sources:
*: https://www.flexjobs.com/blog/post/survey-resignation-workers-considering-quitting-jobs/
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