Daily Markets: Will the November jobs report confirm the slowdown in Fed hikes?

The big picture today

Asia-Pacific stock markets ended today’s session lower as markets reacted to the US PMI showing a slight contraction and a still-high PCE index. Taiwan’s TAIEX and China’s Shanghai Composite both fell just under 0.30%, Hong Kong’s Hang Seng fell 0.33% while India’s SENSEX and ASX Australia’s All Ordinaries were each down 0.66% and Japan’s Nikkei lost 1.59% on the day. South Korea’s KOSPI led the way, down 1.84%, led by industrial services. By midday, European equity indices are mixed and US futures are pointing to a lower open later this morning.

Before US stocks begin trading, the November jobs report will be released. Investors will look to see if job creation and wage gains support the growing market narrative that the Fed may slow the pace of rate hikes. This means confirmation of the slower-than-expected private sector job creation seen in ADP (ADP) November jobs report earlier this week. Investors will also be looking for more subdued wage pressures than found in November data from ADP which showed the median annual wage change for Job-Stayers was 7.6% and 15.1% for Job Changers. . According to the figures, the consensus forecast indicates that the November jobs report indicates that 200,000 non-farm payrolls were added during the month, compared to 261,000 in October. The year-over-year increase in average earnings is expected to slow to 4.6% from October’s 4.7%. Now let’s see what the data says and if it supports the market narrative.

Data download

International economy

Eurozone producer price inflation slowed significantly MoM in October to 30.8% from 41.9% in September and an all-time high of 43.4% recorded in August. The October figure was also below the market consensus of +31.5%. Despite the decline, the data indicates that inflationary pressures across Europe have remained elevated, suggesting the need for continued monetary tightening from the European Central Bank.

Domestical economy

In response to October’s PCE price index at 6.0% in an interview yesterday, New York Fed President John Williams said it would likely take “a few years” to bring inflation back to the Fed’s 2% target. Williams went on to say, “Hopefully we hit our 2% inflation target by 2025.”

Following yesterday’s November ISM Manufacturing PMI report which revealed that the manufacturing economy contracted during the month, the Atlanta Fed’s GDPNow model fell 2.8% for the current quarter per from its previous reading of 4.3%.


December started with a whimper as markets reacted to PMI and PCE releases. the Dow was down 0.56%, the Russell 2000 fell 0.26% and the S&P 500 was near flat, down just 0.09%. The Nasdaq Composite had some legs, relatively speaking, and ended the day up 0.13%. Sectors were mixed, with Communication Services leading with a 0.58% gain, followed by Healthcare up 0.29%, only offset by Financials down 0.58% and Consumer base closing down 0.45%. Investors continue to punish underperforming companies Salesforce (CRM) fell 8.27% on a poor quarter, lower forecasts and the unexpectedly announced departure of co-CEO Bret Taylor.

Here’s how the major market indicators stack up since the start of the year:

  • Dow Jones Industrial Average: -5.35%
  • S&P 500: -14.47%
  • Nasdaq compound: -26.61%
  • Russell 2000: -16.20%
  • Bitcoin (USD-BTC): -63.45%
  • Ether (ETH-USD): -65.41%

Stocks to Watch

Prior to the start of trading for stocks listed in the United States, Cracker Barrel (CBRL) and Manchester United (MANU) will be among the few companies to publish their latest quarterly results.

Semiconductor company’s October quarter results Marvell (MRVL) fell short of consensus forecasts for its revenue and net income. It should be noted that while its Data Center segment saw a 26% increase in revenue year-on-year, revenue for this segment fell 3% quarter-on-quarter. The company also said it was seeing a significant slowdown with Chinese customers and estimates its revenue from China-based OEM customers will fall by more than a third in the current quarter compared to the October quarter. Marvell also warned that it is seeing its data center revenue decline by a mid- to high-teen percentage year-over-year and about 20% on a sequential basis. This led Marvell to issue a lower forecast for its January quarter with EPS of $0.41-0.51 versus consensus of $0.62.

cloud security company Z-scale (ZS) beat consensus expectations for its October quarter as revenue climbed more than 54% from the year-ago quarter. For fiscal 2023, the company forecasts revenue of $1.525 billion to $1.53 billion, up about 40% year-over-year, and calculated billings of $1.93 billion to $1.94 billion. , up about 30% year-on-year. On its earnings call, Zscaler joined CrowdStrike (CRWD) sharing that he sees sales cycles lengthening as customers navigate the macro environment.

Ambarella (AMBA) issued a lower outlook for its current quarter after announcing better-than-expected net results for the October quarter. For its January quarter, the company is forecasting revenue of $81-85 million versus consensus of $86.4 million and $83.1 million reserved for the October quarter.

Ulta Beauty (ULTA) crushed consensus October EPS expectations as its revenue for the quarter climbed more than 17% year-on-year to $2.34 billion, beating consensus of $2.21 billion. Paid sales for the quarter increased by +14.6% thanks to a 10.7% increase in transactions and a 3.5% increase in the average ticket. The company noted that the skin care, fragrance and bath, hair care and makeup segments all saw double-digit growth in makeup from the prior year quarter. For its 2023 fiscal year, Ulta raised its EPS forecast to $22.60-$22.90 from the previous range of $20.70-$21.20 and the consensus of $21.38. The company also increased its sales guidance for fiscal year 2023 to +12.6%-13.2% from +9.5%-10.5%.

Stellantis (STLA) has entered into a strategic partnership with the French mobility engineering company Qinomic to develop a retrofit solution to transform light commercial vehicles with internal combustion engines into an electric drivetrain.

The attorneys general of California, Illinois and Washington DC have asked a federal court for a preliminary injunction that would prevent Albertsons Companies (ACI) to pay a dividend of $4 billion to shareholders prior to its acquisition by Kroger (KR).

Fortune Brands Home and Security (FBHS) entered into a definitive agreement to acquire the high-end and luxury door and cabinet hardware businesses of Emtek and Schaub and the U.S. and Canadian residential smart lock businesses Yale and August from ASSA ABLOY (ASAZY)for a purchase price of $800 million.

Bloomberg reports Apple (AAPL) plans to introduce its mixed reality headset next year, complete with a dedicated operating system now called “xrOS” and an app store for third-party software. The software’s new name is a nod to the headset’s mixed reality capabilities. “XR” stands for Extended Reality, a term that encompasses both Augmented Reality and Virtual Reality.


As we head into the holiday season, the short-term IPO schedule is quite light, so there are no major IPOs scheduled to price this week. Readers who want to dig deeper into the schedule of upcoming IPOs should visit Nasdaq’s Latest and Upcoming IPOs page.

After today’s market close

It’s Friday again! And that means no company is expected to report quarterly results after shares halt trading today. Those interested in learning more about which companies release their reports when head to the Nasdaq earnings calendar.

on the horizon

Monday, December 5

  • Eurozone: S&P Global Services PMI – November
  • Eurozone: Sentix Investor Confidence – December
  • Euro zone: Retail sales – October
  • United States: S&P Global Services PMI – November
  • United States: ISM non-manufacturing index – November
  • United States: Factory Orders – October

tuesday 6 december

  • Japan: Household spending – October
  • Germany: factory orders – October
  • Eurozone: HIS S&P Global Construction PMI – November

Wednesday, December 7

  • China: Imports/Exports – November
  • Japan: Leading indicators – October
  • Euro zone: Report on the evolution of employment, GDP – 3rd quarter 2022
  • US: Weekly MBA Mortgage Applications
  • United States: Productivity and unit labor costs – 3rd quarter 2022
  • United States: EIA Weekly Crude Oil Inventories
  • United States: consumer credit – October

Thursday, December 8

  • Japan: GDP – 3Q 2022
  • United States: Initial and Continuing Weekly Unemployment Claims
  • United States: EIA Weekly Natural Gas Inventories

Friday, December 9

  • China: CPI, PPI – November
  • United States: producer price index – November
  • United States: Consumer Sentiment from the University of Michigan (preliminary) – December

Thought of the day

“Happy Friday! Here’s to all of us who have made it through another week of simulation adulthood. Nana Hoffmann


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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