CURRENCY MARKET WRAP
As of Mon 13 Jan, Singapore Time zone UTC+8
U.S. Dollar Index, -0.09%, 97.36
USDJPY, -0.05%, $109.47
EURUSD, +0.14%, $1.1122
GBPUSD, -0.05%, $1.3061
USDCAD, -0.03%, $1.3052
AUDUSD, +0.66%, $0.6903
NZDUSD, +0.24%, $0.6631
December nonfarm payrolls increased by 145,000 (consensus 160,000), private sector payrolls increased by 139,000 (consensus 157,000), the unemployment rate was 3.5% (consensus 3.5%), and average hourly earnings were up 0.1% (consensus +0.3%). The key takeaway from the report, which included updates to the seasonal adjustment factors for the labor force series derived from the household survey, was that average hourly earnings and the average workweek were both weaker than expected. That may temper any inflation concerns, but at the same time it is apt to temper consumer spending activity and overall GDP growth expectations for the fourth quarter.
Wholesale inventories decreased 0.1% m/m in November (consensus +0.2%) after increasing 0.1% in October. Wholesale sales surged 1.5% after declining 0.9% in October.
U.S. Treasuries ended the session on a higher note as part of a defensive-oriented trade. The 2-yr yield declined one basis point to 1.56%, and the 10-yr yield declined three basis points to 1.83%. The U.S. Dollar Index declined 0.09% to 97.36. WTI crude fell 0.9%, or $0.55, to $58.99/bbl.
STOCK MARKET WRAP
S&P500, -0.29%, 3,265.35
Nasdaq, -0.27%, 9,178.86
Nikkei Futures, +0.42%, 23,800.0
Stock market hit new highs on Friday but succumbed to profit taking late in the session, as the December employment report failed to generate much excitement. In turn, the momentum that carried the market to record highs gradually transitioned to overdue selling, as cyclical sectors led the decline and selling picked up into the close. The S&P 500 financials (-0.8%), industrials (-0.7%), energy (-0.6%), and consumer discretionary (-0.5%) sectors were today’s laggards. The defensive-oriented real estate (+1.0%), utilities (+0.2%), and health care (+0.04%) sector finished higher.
Boeing (BA 329.92, -6.42, -1.9%) shares were pressured after disparaging employee memos about the 737 MAX situation were released. On a related, Boeing supplier Spirit Aerosystems (SPR 69.70, -3.09, -4.3%) said it will eliminate 2,800 jobs.
Six Flags (SIX 35.96, -7.80, -17.8%), KB Home (KBH 35.86, -1.20, -3.2%), and GrubHub (GRUB 52.38, -3.35, -6.0%) were other negative story stocks after providing disappointing updates. Six Flags issued downside Q4 guidance, KB Home missed revenue estimates, and GrubHub denied reports that it was seeking a sale.
In M&A activity, Dermira (DERM 19.16, +0.82, +4.5%) agreed to be acquired by Eli Lilly (LLY 138.00, +2.08, +1.5%) for $18.75 per share or $1.1 billion in cash.