(Bloomberg) – A cautious mood prevailed in markets ahead of a key U.S. jobs report that could give traders insight into the Federal Reserve’s policy direction.
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US stock futures showed small movements. The dollar has trended higher in nine of the past 10 weeks due to modest gains in the dollar. US Treasury yields continue to rise. The decline in oil prices extended into a third day.
Economists estimate that U.S. nonfarm payrolls rose by 220,000 in November as employment rebounded from weather-related and strike-related disruptions. This is the last jobs report before the Fed’s next rate decision, and there is about a 65% chance that swaps will lower rates by half a percentage point later this month.
“If we get some surprisingly strong numbers, we’ll see prices go back even further to 50/50,” said Michael Brown, senior strategist at Pepperstone. “Given this time of year, market volume is lower than usual, so we’re more likely to see an outsized reaction. That’s another reason people are staying silent.”
A week of political turmoil in France was set to end on a positive note for markets. The country’s national debt outperformed euro zone countries after National Rally leader Marine Le Pen told Bloomberg News that a budget could be delivered within weeks. The euro was strong. The CAC40 index rose more than 1%, extending its seven-day winning streak and breaking its longest winning streak in nearly 10 months.
Friday’s developments in the U.S. labor market will have a major impact on whether the S&P 500 can build on its 27% rise this year. Excitement around artificial intelligence and optimism that President-elect Donald Trump’s policies will boost U.S. markets are pushing the benchmark toward its best year since 2019.
Bank of America strategist Michael Hartnett said the asset class looks frothy, driven by strong gains in U.S. stocks and cryptocurrencies.
The S&P 500’s price-to-book ratio will jump to 5.3x in 2024, approaching the 5.5x peak reached in March 2000 at the height of the tech bubble, according to data compiled by Bloomberg. BofA’s Hartnett said there was a high risk of an “overshoot” in early 2025 as the S&P 500 approaches 6,666 points, about 10% above current levels.
Hartnett said Bitcoin has a market capitalization of over $2 trillion, making the digital asset comparable in size to the world’s 11th largest economy. On Friday, Bitcoin fell back from its all-time high of over $103,000, with the decline reaching 7% at one point.
the story continues
In Asian trading, Chinese stocks rose as investors showed hope for new economic support from a major policy meeting starting Wednesday.
South Korea was another focus, with the won earlier falling after the army’s special forces commander said he would not impose martial law a second time. The country’s benchmark stock index fell by as much as 1.8% before narrowing its decline.
In commodities, concerns that the Organization of the Petroleum Exporting Countries (OPEC+)’s decision to postpone the restart of halted production will not prevent it from generating a surplus next year spurred a decline in crude oil prices.
Company highlights:
Lululemon Athletica inched up its full-year outlook, citing strong overseas sales, a sign the luxury activewear brand is fending off emerging competitors and weathering slowing consumer spending growth. .
Aviva has reached a preliminary agreement to acquire Direct Line Insurance Group for £3.6 billion ($4.6 billion), creating the UK’s largest motor insurance company.
Hewlett Packard Enterprise Co. reported better-than-expected quarterly revenue and a jump in sales of servers powered by artificial intelligence.
Shares in Puig Brands SA fell to their lowest level since the Spanish beauty company went public in May after the Charlotte Tilbury brand pulled some of its setting spray products.
Holcim’s proposed spin-off of its North American operations is expected to take place by the end of the first half of next year, the company said in a statement.
This week’s main events:
The main movements in the market are:
stock
S&P 500 futures were little changed as of 7:15 a.m. New York time.
Nasdaq 100 futures little changed
Dow Jones Industrial Average futures little changed
Stoxx European 600 rose 0.2%
MSCI World Index little changed
currency
Bloomberg Dollar Spot Index little changed
The euro was almost unchanged at $1.0585.
Sterling rose 0.1% to $1.2773.
The Japanese yen fell 0.3% to 150.56 yen to the dollar.
cryptocurrency
Bitcoin fell 0.6% to $98,436.04.
Ether rose 0.6% to $3,883.68
bond
The 10-year government bond yield was almost unchanged at 4.18%.
The yield on German 10-year bonds rose 1 basis point to 2.12%.
UK 10-year bond yield remains unchanged at 4.29%
merchandise
West Texas Intermediate crude oil fell 1% to $67.59 per barrel.
Spot gold rose 0.3% to $2,639.57 an ounce.
This article was produced in partnership with Bloomberg Automation.
–With assistance from Sagarika Jaisinghani and Divya Patil.
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