New York Stock Market Mixed Ahead of This Week's Employment Data... Intel Rises on CEO Resignation

Major Employment Data Released This Week
Focus on November Nonfarm Payrolls on the 6th
Fed Officials' Speeches Continue This Week
Intel Rises 3.4% After CEO Pat Gelsinger Resigns

The three major indices of the U.S. New York Stock Exchange showed mixed trends in the early trading session on December 2 (local time), the first trading day of the month. Investors appeared cautious as they awaited the release of employment data scheduled for this week. Intel's stock price rose more than 3% following the resignation announcement of CEO Pat Gelsinger.

As of 10:50 a.m. in the New York stock market, the Dow Jones Industrial Average, which focuses on blue-chip stocks, was down 0.24% from the previous trading day at 44,803.88. The S&P 500, centered on large-cap stocks, was up 0.19% at 6,043.6, and the Nasdaq, which is tech-heavy, was trading 0.86% higher at 19,382.86.

By individual stocks, Intel was up 3.43%. After the company announced that CEO Gelsinger, who was brought in as a savior in 2021, resigned after four years without delivering results, the stock rose 2.65%. Tesla was on the rise after Ross MKM upgraded its investment rating from 'neutral' to 'buy.' The firm viewed Tesla CEO Elon Musk, known as the 'First Buddy' (the president's close friend) of then-President-elect Donald Trump, as a positive factor for future stock price gains. Super Micro Computer surged 20.53% after a special committee investigating accounting fraud reported no evidence of wrongdoing and the company appointed a new accounting officer.

Last month, the New York stock market rose on the victory of Trump, who promised business-friendly policies. The Dow rose 7.5%, and the S&P 500 jumped 5.7%, marking the highest monthly gain this year. The Russell 2000 index, composed mainly of small- and mid-cap stocks, rose more than 10%. Bitcoin, the leading cryptocurrency, soared 38% in November on Trump's pledge to ease regulations. Given the strong performance of the New York stock market so far this year, expectations for a 'Santa Rally' in December are spreading.

The U.S. manufacturing index released this morning continued to show contraction. The Institute for Supply Management (ISM) reported the November manufacturing Purchasing Managers' Index (PMI) at 49.7, surpassing both the previous month’s 48.5 and expert forecasts of 48.8. The manufacturing PMI, a leading economic indicator, signals expansion when above 50 and contraction when below 50, indicating that the U.S. manufacturing sector remains in a contraction phase.

The main focus of the market this week is employment data. The most important indicator is the November nonfarm payrolls to be released by the U.S. Department of Labor on the 6th. The market expects an increase of 200,000 jobs based on Bloomberg's forecast. Due to two hurricanes and a Boeing strike, October saw only a 12,000 increase. However, compared to the 223,000 increase in September nonfarm payrolls, a large increase is not expected. The unemployment rate is forecast to remain steady at 4.1%. Other employment data will be released consecutively: the October Job Openings and Labor Turnover Survey (JOLTs) on the 3rd, ADP’s November private nonfarm payrolls on the 4th, and weekly initial jobless claims on the 5th.

These employment indicators are expected to influence the Federal Open Market Committee (FOMC) interest rate decision scheduled for December 17-18. The market currently places a high probability on a rate cut this month. According to the Chicago Mercantile Exchange (CME) FedWatch tool, the federal funds futures market reflects a 65% chance of a 0.25 percentage point rate cut at the December FOMC meeting and a 35% chance of rates remaining unchanged.

This afternoon, speeches by Federal Reserve (Fed) officials are also scheduled. Fed Governor Christopher Waller and New York Fed President John Williams will speak. Fed Chair Jerome Powell and Chicago Fed President Austan Goolsbee are also set to give speeches this week. Investors are expected to seek clues about the current economic assessment, outlook, and future interest rate path from these remarks. Additionally, the Fed’s Beige Book, a report on economic conditions, will be released on the 4th.

U.S. Treasury yields are rising. The 10-year U.S. Treasury yield, a global bond benchmark, rose 3 basis points (1 bp = 0.01 percentage point) from the previous trading day to 4.22%, while the 2-year Treasury yield, sensitive to monetary policy, increased 4 basis points to around 4.22%.

International oil prices are rising. West Texas Intermediate (WTI) crude oil rose $0.35 (0.51%) from the previous trading day to $68.35 per barrel, and Brent crude, the global oil price benchmark, increased $0.27 (0.38%) to $72.11 per barrel.