Tech Stocks Rally Amid Santa Rally Expectations
Salesforce and Marvel Surge on Strong Earnings
November Private Employment Up 146,000, Below Expectations
Focus on Powell's Speech This Afternoon
The three major indices of the U.S. New York Stock Exchange are rising in early trading on the 4th (local time). Amid expectations of a 'Santa Rally,' technology stocks such as enterprise software company Salesforce and semiconductor company Marvell Technology are pushing stock prices higher. Investors are awaiting the speech by Jerome Powell, Chair of the U.S. Federal Reserve (Fed), scheduled for the afternoon. Korean-related stocks, which fell following President Yoon Seok-yeol's declaration and lifting of martial law the previous day, are showing mixed price movements.
As of 10:55 a.m. in the New York stock market, the Dow Jones Industrial Average (Dow), centered on blue-chip stocks, is trading at 44,840.14, up 0.3% from the previous trading day. The large-cap S&P 500 index is up 0.3% at 6,068.3, and the tech-heavy Nasdaq index is up 0.9% at 19,656.76.
By stock, Salesforce surged 8.98% after announcing third-quarter fiscal year results that exceeded market expectations. Marvell Technology also jumped 20.86% following better-than-expected earnings and an optimistic outlook for the fourth quarter.
Korean-related stocks, which had fallen due to President Yoon's martial law declaration and lifting incident the previous day, are showing mixed trends. Webtoon Entertainment surged 9.13%, and POSCO Holdings rose 0.88%. On the other hand, Coupang fell 0.96%, while KT and KB Financial declined 1.94% and 0.74%, respectively. The won-dollar exchange rate recorded 1,414.21 won, down 0.02% from the previous day.
Investors are paying attention to whether the strong New York stock market rally since the U.S. presidential election on the 5th of last month will continue into December. George Smith, portfolio strategist at LPL Financial, said, "December is historically a seasonally good month for the stock market," adding, "When the calendar turns to December, stock momentum can continue."
On the morning of the same day, a report showed that private employment is slowing down. According to the employment report released by ADP, a U.S. private labor market research firm, private sector new job creation in November increased by 146,000. This fell short of the market expectation of 166,000 and the October figure of 184,000. The average wage in November rose 4.8% compared to a year ago. This increase expanded compared to the previous month, marking the first time in 25 months.
Nela Richardson, ADP's chief economist, evaluated, "Overall growth was good over the month, but performance varied by industry," adding, "Manufacturing had the weakest job creation since last spring, and financial services and leisure & hospitality also showed weakness."
However, the ADP private employment report is considered by the market to not provide an accurate picture of the labor market. The most reliable employment trends will be confirmed in the November employment report to be released by the U.S. Department of Labor on the 6th. The market expects nonfarm payrolls to have increased by 200,000 last month. The unemployment rate is forecast to have remained steady at 4.1% compared to the previous month.
The November employment report is expected to influence the Federal Open Market Committee (FOMC) regular meeting's interest rate decision scheduled for December 17-18. According to the Chicago Mercantile Exchange (CME) FedWatch, the federal funds futures market on this day reflects a 75.7% chance that the Fed will cut rates by 0.25 percentage points at the December FOMC meeting and a 24.3% chance of holding rates steady.
Investors are awaiting Chair Powell's speech scheduled for the afternoon. The Fed's Beige Book, a report on economic conditions, will also be released that afternoon.
Government bond yields are moving within a narrow range. The U.S. 10-year Treasury yield, a global bond yield benchmark, remains at 4.22%, the same level as the previous trading day, while the 2-year Treasury yield, sensitive to monetary policy, is down 1 basis point (1bp = 0.01 percentage point) to 4.15%.
International oil prices are slightly lower. West Texas Intermediate (WTI) crude oil is trading at $69.92 per barrel, down $0.02 (0.03%) from the previous day, and Brent crude, the global oil price benchmark, is trading at $73.54 per barrel, down $0.08 (0.11%).
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