Buzz on Business for Friday, December 8^th, 2023

Yesterday, we commented that the economy and markets were in transition and that you could tell by the many contradictions in economic and market commentary.

We also reported that stocks sold off during the day, partially as a result of some bad news from the ADP Jobs Report, which missed expectations by a wide margin.

Today, we got another jobs report, the weekly Initial Claims for Unemployment, and, you guessed it, this one reported good news. Go figure!

Stocks had a good day on Thursday, although we think it had less to do with the labor market than with Google’s announcement on its Artificial Intelligence product.

Market Report

• The Dow Jones Industrials gained sixty-three points, that’s 2/10ths of a percent and closed at 36,117,
• The S+P 500 was up 8/10ths of a percent and closed at 4,586, up thirty-six points.
• The Nasdaq Composite had a great day. The techs were up 193 points. 1.4%, and they closed at 14,339.
• The XRT, the Standard and Poors retailers, also had a pretty good day. They gained 1.1% on the day and closed at 67.07, up .72.

The Bond market traded in a tight range and finished mixed.

• The yield on the two-year Treasury was down about two basis points and closed at 4.588%
• The twenty-year closed with a yield of 4.428%, off three ticks.

Yield Curve Remains Inverted

Now might be a good time to remind our readers that the yield curve remains inverted and is becoming increasingly so. Typically, long-term rates paid by the government are higher than short-term rates. The same is true with your mortgage. You’ll pay a higher rate on a thirty-year loan than you would if you plan to pay off your house in fifteen years.

However, now, that’s not the case with US government debt. The rate on the one-month Treasury bill is 5.375%. On the thirty-year, it’s just 4.25%.

An inverted yield curve is one of the predictors of an impending recession. We will discuss why that might be on our Premium episode of the Buzz on Business that will be published on Sunday.

• Oil, which, with yesterday’s loss, fell into solid support around $70 a barrel, bounced slightly today. It was up forty-two cents and closed at $69.60.
• Gold was off $2.10, and an ounce of the shiny yellow stuff will set you back $2,045.80

More Labor Market Data On Tap

We get more labor market data later this morning. Average Hourly Earnings is released today. Economists expect wages to have grown at a 3.6% rate, month over month. We also got the Non-farm Payroll Report from the Commerce Department today. Expectations are for 180,000 new jobs in November. We will be interested in seeing how these data contrast and compare with yesterday's ADP report. We will do what we do and report it all to you here and tomorrow on the Buzz.