Three Major Indexes Hit Previous Highs... Early Market Pauses
Bitcoin Surpasses $100,000 for the First Time, Related Stocks Rise
New Unemployment Claims Exceed Expectations
Focus on November Employment Report to Be Released on the 6th
The three major indices of the U.S. New York Stock Exchange showed slight declines in early trading on the 5th (local time). After all three indices hit record highs the previous day, the market appears to be taking a breather. The leading cryptocurrency, Bitcoin, remains strong after surpassing $100,000 the day before.
As of 10:46 a.m. in the New York stock market, the Dow Jones Industrial Average (Dow) focused on blue-chip stocks was down 0.25% from the previous trading day, standing at 44,900.19. The large-cap S&P 500 index fell 0.08% to 6,081.34, and the tech-heavy Nasdaq index slipped 0.03% to 19,728.52.
By individual stocks, cryptocurrency-related shares are rising following Bitcoin's first-ever breakthrough above $100,000 the previous day. Cryptocurrency exchange Coinbase is up 1.11%, and MicroStrategy, which holds the largest amount of Bitcoin among listed companies, is up 0.44%. As of 10:50 a.m. Eastern Time, Bitcoin was trading at $101,227.09, up 5.4% from the previous trading day.
The previous day, all three major indices in the New York Stock Exchange rose to new all-time highs. The Dow Jones Industrial Average (Dow) surpassed the 45,000 mark for the first time. Tech stocks surged amid expectations of a "Santa Rally," and optimism about the U.S. economy was boosted by Federal Reserve Chairman Jerome Powell. At an event in New York, Powell said, "The economy is stronger than we expected last September," and added, "The Fed has room to be more cautious until we find a neutral interest rate level that neither stimulates nor slows economic growth." This reaffirmed the possibility of slowing the pace of interest rate cuts due to solid economic growth.
Investors are watching whether the strong New York stock market rally following the U.S. presidential election will continue into a December Santa Rally. Tony Psacquariello, Global Head of Hedge Funds at Goldman Sachs, said, "I think there is still fuel in the tank as we move through December into 2025," adding, "It is still a bull market, and the main trend is upward. If our forecasts for growth, the Fed, and technology are all correct, all these factors mean the bull market will continue."
Last week’s U.S. initial jobless claims, released this morning, exceeded market expectations. According to the U.S. Department of Labor, initial jobless claims for the week of November 24?30 rose by 9,000 from the previous week's revised figure to 224,000, marking the highest level in a month. The expert consensus of 215,000 was also exceeded by 9,000. Since the Fed began its monetary easing cycle in September, Wall Street has been closely monitoring the labor market. The key report will be the November employment report released by the U.S. Department of Labor on the 6th. Experts expect nonfarm payrolls to have increased by 200,000 last month, with the unemployment rate remaining steady at 4.1%.
The market is widely expecting the Fed to cut interest rates by 0.25 percentage points at the Federal Open Market Committee (FOMC) meeting scheduled for December 17?18, followed by a rate hold in January. According to the Chicago Mercantile Exchange (CME) FedWatch tool, the federal funds futures market currently prices a 68.4% chance of a 0.25 percentage point rate cut at the December FOMC meeting and a 31.6% chance of a rate hold. The probability of a rate hold in January after a small cut (0.25 percentage points) in December is 58.2%.
Investors are also awaiting remarks from Thomas Barkin, President of the Federal Reserve Bank of Richmond, scheduled for today.
U.S. Treasury yields are on the rise. The 10-year U.S. Treasury yield, a global benchmark for bond yields, rose 3 basis points (1 bp = 0.01 percentage points) from the previous trading day to 4.21%, while the 2-year Treasury yield, sensitive to monetary policy, increased 5 basis points to 4.17%.
International oil prices are steady. West Texas Intermediate (WTI) crude oil is trading at $68.53 per barrel, down $0.01 (0.01%) from the previous day, while Brent crude, the global benchmark, is up $0.05 (0.07%) to $72.36 per barrel.
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