The American markets showed mixed results on Friday following employment data indicating increased job growth in November, while the euro weakened against the dollar due to political unrest in France. The US labor market report revealed a significant increase in employment in November, but a rise in the unemployment rate to 4.2 percent pointed to a slowdown in the job market. Futures markets priced in an 85 percent probability of the Federal Reserve lowering interest rates by 25 basis points at its meeting on December 17-18, compared to 68 percent earlier in the session. The broad S&P 500 index advanced by 0.3 percent, while the tech-heavy Nasdaq and the Dow Jones industrial index increased by 0.8 percent and decreased by 0.3 percent, respectively.
Commodities traded mixed on Friday. Oil prices fell on Friday, cementing weekly losses as analysts predict an oversupply next year due to weak demand. This is despite OPEC+ deciding to delay production increases and extend deep production cuts until the end of 2026. An increase in the number of oil and gas rigs in operation in the US this week, from 582 to 589, also pushed prices downward. OPEC+, accounting for about half of the world’s oil production, planned to start easing production cuts from October 2024, but a slowdown in global demand – especially from the largest oil importer, China – and increasing production elsewhere have forced the group to postpone the plan multiple times. At the close, WTI crude oil decreased by 1.1 dollars to 67.2 dollars per barrel, while Brent crude oil dropped by 1.0 dollars to 71.1 dollars per barrel.
Base metals moved in different directions on Friday. The day’s losers were lead, which declined by 1.5 percent, followed by zinc and aluminum, both of which retreated by 1.2 percent. Tin dropped by 0.6 percent, while copper traded sideways. However, nickel rose by 0.4 percent. Gold prices edged up on Friday after the US job report for November showed a gradual cooling of the job market, opening the possibility for the Federal Reserve to cut rates again. Expectations of rate cuts, initiated with a rate cut in September, have fueled gold’s record rally this year, as lower rates increase the attractiveness of yield-free gold. The price of gold rose by 2.4 dollars to 2,634.1 dollars per ounce.
Among individual US companies, Meta reached a record high amid news that TikTok could be banned in the US following a court ruling forcing parent company Bytedance to sell the app in January. United Health Group fell by 7.6 percent after the CEO of the company’s insurance division died on Wednesday. Chip giant Nvidia’s stock dropped by 1.8 percent after the EU’s competition authority questioned the company’s competitors about whether it is using prohibited methods to gain market advantages.
The US ten-year Treasury bond fell by 3 basis points to 4.15 percent.
Asian stocks struggled on Monday, with a decline in South Korea, ahead of a week filled with central bank meetings expected to lead to lower borrowing costs, where US inflation data is seen as the country’s final obstacle for further monetary easing. Chinese figures released on Monday showed that consumer prices fell unexpectedly by 0.6 percent in November, dragging annual inflation down to just 0.2 percent and emphasizing the need for more drastic stimulus measures. Political unrest in France and South Korea was followed by the fall of the Syrian President Bashar al-Assad’s regime, further complicating an already tense situation in the Middle East. At 07:45, the Japanese Nikkei 225 index rose by 0.2 percent, while the Chinese Shanghai and Hang Seng indices fell by 0.1 percent and 0.4 percent, respectively.
On the reporting front, Monday is relatively calm. Among today’s recommendations, Pareto Securities raised the target price for Kinnevik to 130 kronor (from 120) and reiterated a buy recommendation. Ericsson’s target price was raised to 98 kronor (from 70.5) by investment bank JP Morgan, which reiterated a neutral recommendation. Morgan Stanley dropped the sell rating for ABB and instead introduced a neutral recommendation with a target price of 48 Swiss francs.
On the macro level, Monday is relatively quiet. The day started with the announcement of Japan’s third-quarter gross domestic product at 00:50, which rose by 0.3 percent. This was followed by the annual Chinese consumer price index released at 02:30, which fell by 0.2 percent. At 13:00, the Mexican monthly consumer price index will be announced, and the day will conclude with US consumers’ inflation expectations reported at 15:00.