US Stocks Lose Ground into the Weekend – Nasdaq Down 1.7%
US equity markets moved lower on Friday as investors grew increasingly cautious around stretched valuations in the technology sector, while comments from Federal Reserve officials reinforced concerns that inflation pressures may persist. The Dow Jones fell 0.50% to close at 48,458, while broader losses were seen in the S&P 500, which dropped 1.07% to 6,827. The Nasdaq underperformed, sliding 1.69% to finish at 23,195. The US dollar was little changed on the session, with the DXY edging just 0.05% higher to 98.39. Treasury yields were mixed, with the 2-year yield easing by 1.8 basis points to 3.522%, while the 10-year yield rose 2.7 basis points to 4.184%. Oil prices drifted modestly lower as oversupply concerns heading into the new year continued to weigh on sentiment. Brent slipped 0.26% to $61.12 a barrel, while WTI fell 0.28% to $57.44. In contrast, gold pushed higher, gaining 0.45% to $4,299.63, reaching its highest level in nearly two months as investors sought defensive exposure.
Non-Farms on a Tuesday to Move Markets
It is a huge day for financial markets on Tuesday, with delayed US employment numbers due out that will include data from both October and November. The impact of the US government’s largest-ever shutdown is still reverberating around financial markets, and tomorrow’s Non-Farms data being released on a Tuesday is another strange update for seasoned campaigners who are used to the usual Friday release. Estimates are varied across the market due to the data blackout in October and November, and therefore traders are expecting plenty of volatility around the event. The variation in estimates is fairly wide for the headline figure, but a range of +50k to +80k seems to cover most of the market, and any significant deviation will see strong moves across all financial products.
Quiet Start to a Busy Calendar Week
It is a quiet start to the week on the macroeconomic calendar, although traders are positioning ahead of a very busy period of central bank meetings and key economic data releases over the coming days, which are expected to drive volatility across markets. There is a big data dump due out of China during the Asian session today, with the highlights being Industrial Production (exp +5.0% y/y) and Retail Sales (exp +3.0% y/y), which could move local markets. There is little scheduled in the London session; however, key inflation data due out of Canada should see some volatility in the loonie. The monthly CPI number is expected to show a 0.1% increase, with the median year-on-year data expected to print at +2.9%. The US Empire State Manufacturing Index data is due out at the same time, with a +9.8 figure priced into the market. We also hear from Fed members Miran and Williams later in the day.
