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Jobs Week to Kick Off with JOLTS; Fed Minutes Today
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Don’t be fooled by the deceptively slow start to the 2024 trading year — we’ve got big news coming by the end of the week. Actually, the big news starts today, with the Job Openings and Labor Turnover Survey (JOLTS) for November, ISM Manufacturing for December and minutes from the latest Fed meeting — though none of it is out before today’s opening bell. We’ll also get private-sector payrolls from ADP (ADP - Free Report) for December along with Weekly Jobless Claims tomorrow, and the all-important Employment Situation report Friday morning.
In other words, it’s Jobs Week, along with being a holiday-shortened first trading week of the year. If you thought holiday season came fast, winter break has been even faster!
The JOLTS numbers for November, out at 10am ET today, are expected to tick up slightly from previous-month lows not seen since early 2021. A headline of roughly 8.8 million job openings are expected to be reported for the month, up from 8.7 million in October. These are well off cycle highs — 11.2 million job openings in December of 2022, and 12 million as recently as early that same year.
The hires rate last time around grew in decidedly non-crowded states — Montana +5.4%, Alaska +5.2%, Delaware +4.9% and West Virginia +4.8% — and grew weakest in areas with high populations, like +2.8% in both New York and Washington DC. The Job Quits Rate looks to make it four months in a row at 2.3% — directly between the all-time high 3.0% back in November 2021 and all-time low 1.2% in August of 2009.
ISM Manufacturing for last month is expected to come in higher than the last two months to 47.2% or so, though well off the big spike up to 49% we saw a few months ago. Cycle lows came back in June: 46%. All this said, we are at the longest period sub-50% (the demarkation point between growth and loss) since the Great Recession in late 2008 and through 2009.
Ahead of today’s Fed minutes release, which may provide the biggest impact to the market of the day’s economic news, is being foreshadowed this morning by Richmond, VA Fed President Tom Barkin, who told CNBC this morning that even though a “soft landing” is increasingly conceivable, it is not guaranteed. He also stated plainly that any interest rate cuts — of which three are predicted in the Fed’s own dot-plot this year — will only happen with clear signs of inflation ending. And, perhaps more ominously, future rate hikes “are not off the table.”
Why this might be impactful for the market is that the Fed minutes may throw cold water on the exuberance we saw in market activity through the final two months of the calendar year. These three interest rate cuts telegraphed by the Fed itself is currently being translated into six cuts — from 75 basis points (bps) to 150 bps, which is a big difference. It would please the Fed for the stock market not to bid too high in the near term.
As it is, we’re starting lower this morning after a big Nasdaq sell-off yesterday (largely on the downgrade of Apple [(AAPL - Free Report) ], which reports earnings on February 1st) and nominal gains on the blue-chip Dow. The Dow is down -100 points currently, the S&P 500 is -15 and the Nasdaq is down another -80 points. Not that these indices can’t absorb a little profit-taking, but it could be market participants are getting ahead of what might be interpreted as disruptive news from the Fed minutes. Questions or comments about this article and/or author? Click here>>
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Jobs Week to Kick Off with JOLTS; Fed Minutes Today
Don’t be fooled by the deceptively slow start to the 2024 trading year — we’ve got big news coming by the end of the week. Actually, the big news starts today, with the Job Openings and Labor Turnover Survey (JOLTS) for November, ISM Manufacturing for December and minutes from the latest Fed meeting — though none of it is out before today’s opening bell. We’ll also get private-sector payrolls from ADP (ADP - Free Report) for December along with Weekly Jobless Claims tomorrow, and the all-important Employment Situation report Friday morning.
In other words, it’s Jobs Week, along with being a holiday-shortened first trading week of the year. If you thought holiday season came fast, winter break has been even faster!
The JOLTS numbers for November, out at 10am ET today, are expected to tick up slightly from previous-month lows not seen since early 2021. A headline of roughly 8.8 million job openings are expected to be reported for the month, up from 8.7 million in October. These are well off cycle highs — 11.2 million job openings in December of 2022, and 12 million as recently as early that same year.
The hires rate last time around grew in decidedly non-crowded states — Montana +5.4%, Alaska +5.2%, Delaware +4.9% and West Virginia +4.8% — and grew weakest in areas with high populations, like +2.8% in both New York and Washington DC. The Job Quits Rate looks to make it four months in a row at 2.3% — directly between the all-time high 3.0% back in November 2021 and all-time low 1.2% in August of 2009.
ISM Manufacturing for last month is expected to come in higher than the last two months to 47.2% or so, though well off the big spike up to 49% we saw a few months ago. Cycle lows came back in June: 46%. All this said, we are at the longest period sub-50% (the demarkation point between growth and loss) since the Great Recession in late 2008 and through 2009.
Ahead of today’s Fed minutes release, which may provide the biggest impact to the market of the day’s economic news, is being foreshadowed this morning by Richmond, VA Fed President Tom Barkin, who told CNBC this morning that even though a “soft landing” is increasingly conceivable, it is not guaranteed. He also stated plainly that any interest rate cuts — of which three are predicted in the Fed’s own dot-plot this year — will only happen with clear signs of inflation ending. And, perhaps more ominously, future rate hikes “are not off the table.”
Why this might be impactful for the market is that the Fed minutes may throw cold water on the exuberance we saw in market activity through the final two months of the calendar year. These three interest rate cuts telegraphed by the Fed itself is currently being translated into six cuts — from 75 basis points (bps) to 150 bps, which is a big difference. It would please the Fed for the stock market not to bid too high in the near term.
As it is, we’re starting lower this morning after a big Nasdaq sell-off yesterday (largely on the downgrade of Apple [(AAPL - Free Report) ], which reports earnings on February 1st) and nominal gains on the blue-chip Dow. The Dow is down -100 points currently, the S&P 500 is -15 and the Nasdaq is down another -80 points. Not that these indices can’t absorb a little profit-taking, but it could be market participants are getting ahead of what might be interpreted as disruptive news from the Fed minutes.
Questions or comments about this article and/or author? Click here>>