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US stocks traded mixed on Tuesday as investors digested fresh jobs data and waited for new Fedspeak to cement or dent growing hopes for future interest rate cuts.
The S&P 500 (^GSPC) fell about 0.2%, while the tech-heavy Nasdaq Composite (^IXIC) hugged the flat line in late morning trade, coming off fresh records for the two gauges. The Dow Jones Industrial Average (^DJI) reversed earlier gains to fall roughly 0.4%.
Job openings rose by 372,000 to 7.74 million in October compared to estimates of 7.52 million, according to BLS data released on Tuesday.
The Job Openings and Labor Turnover Survey (JOLTS) also showed fewer hires were made during the month while the quits rate, a sign of confidence among workers, rose to 2.1% from 1.9% in September.
The JOLTS data serves as the first in a wave of key signals this week that culminates in Friday’s all-important monthly US payrolls report.
Traders are now pricing in about a 69% chance that the Fed lowers rates by a quarter percentage point at its Dec. 18 meeting, compared with 62% a day ago, per the CME FedWatch tool.
Those odds could shift after Fed policymakers Austan Goolsbee and Adriana Kugler appear later on Tuesday, which will set the stage for Fed Chair Jerome Powell’s panel discussion on Wednesday.
On the corporate front, Tesla (TSLA) stock slipped in early trading after shipments of the EV maker’s China-built models fell again, putting sales targets in doubt. In addition, CEO Elon Musk’s $56 billion pay deal was rejected again by a judge.
Meanwhile, shares in US Steel (X) fell about 8% on the heels of President-elect Donald Trump’s promise to “block” its $15 billion takeover by Japan’s Nippon Steel (5401.T, NPSCY). Trump said tax incentives and tariffs will enable the American steel giant to thrive on its own.
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Sector check: Communication Services gain while Industrials lag
Communication Services (XLC), Health Care (XLV), and Energy (XLE) led Tuesday’s sector action. Markets traded mixed as traders assessed new jobs data and awaited more Fedspeak.
Oil prices stood out, with WTI crude (CL=F) climbing 3% to trade above $70 a barrel. Brent crude (BZ=F), the international benchmark, also rose to trade just below $74 a barrel.
Industrials (XLI) was the day’s biggest laggard, dragged down by shares of Aflac (AFL), which fell 4% as investors weighed a disappointing outlook. Financials (XLF) and Consumer Staples (XLP) also fell.
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US economy poised for ‘solid’ growth in 2025 as America ‘doesn’t import recessions’: BofA
The US economy is on solid footing right now. Economists at Bank of America expect it to stay that way through next year.
In a research note released to reporters on Monday, BofA’s economics team led by Claudio Irigoyen projected the US economy will grow at an annualized rate of 2.4% in 2025, higher than current forecasts for 2% growth, according to the latest Bloomberg consensus estimates.
This comes despite uncertainties surrounding the economic policies of President-elect Donald Trump, including campaign promises of tariffs on imported goods, tax cuts for corporations, and curbs on immigration, which economists have viewed as inflationary.
Higher rates, coupled with a hawkish tariff policy, would strengthen the US dollar and create spillover effects to global financial conditions, representing “a major shock, not only for the US economy but the rest of the world,” according to BofA.
But there’s one important caveat: The US is best prepared to weather any economic storm that follows Trump’s agenda.
“We like to say that the US imports a lot of stuff, but it doesn’t import recessions,” Aditya Bhave, senior US economist at Bank of America, told Yahoo Finance in a separate press briefing on Monday. “It only exports recessions.”
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Job openings rise more than expected in October
Job openings rose more than expected in October as investors continue to dissect the pace of the labor market slowdown seen in the back half of 2024 amid questions over how much further the Federal Reserve will slash interest rates over the next year.
New data from the Bureau of Labor Statistics released Wednesday showed 7.74 million jobs were open at the end of October, an increase from 7.37 million in September.
The September figure was revised lower from the 7.44 million open jobs initially reported. Economists surveyed by Bloomberg expected Tuesday’s report to show 7.51 million openings in October.
The Job Openings and Labor Turnover Survey (JOLTS) also showed 5.31 million hires were made during the month, down from 5.58 million hires made during September. The hiring rate fell to 3.3% from 3.5% in September. Also in Tuesday’s report: The quits rate, a sign of confidence among workers, rose to 2.1% from 1.9% in September.
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Stocks hold near records
US stocks opened mostly higher on Tuesday, hovering near all-time highs.
The S&P 500 (^GSPC) and the tech-heavy Nasdaq Composite (^IXIC) each opened close to the flat line, coming off fresh records for the two gauges. The Dow Jones Industrial Average (^DJI) ticked up about 0.1%.
Investors are bracing for a reading later on JOLTS job openings in October, the first in a wave of key data this week that culminates in Friday’s all-important monthly US payrolls report.
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Good morning. Here’s what’s happening today.
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Intel, day two
Lots of analysis on the CEO shake-up at Intel (INTC) has been released, but this is not a one-day story.
The path forward for Intel is vitally important for the country — the chip supply chain must be diversified beyond a singular reliance on Taiwan Semiconductor (TSM).
But that path forward for Intel will be brutal, at best.
Here are a couple of good points this morning from Evercore ISI analyst Mark Lipacis:
Below are some of my initial insights on Intel CEO Pat Gelsinger’s departure:
