MPW - US Stocks Poised To Extend New Year Slump As Focus Shifts To December Jobs Data: Analyst Sees S&P Testing 4800 On This Condition | Benzinga
Stocks could be headed lower yet again on Friday, with the market off to a rocky start for the year. Technology stocks are getting thrashed amid the risk aversion in play. The all-important jobs report holds the key to determining the day’s trading direction.
Important metrics to track, according to LPL Chief Economist Jeffrey Roach, are the flow of individuals entering the labor force and the ratio of part-time workers to full-timers. More people coming off the sidelines will increase the unemployment rate, he said.
A stronger-than-expected report could push yields higher, creating further downward pressure on the market.
Cues From Thursday's Trading:
The stock market continued to grind lower in the new year, with the major averages trading mostly lower on Thursday. The weakness was the result of investors’ skepticism regarding the ability of the market to sustain the strong upward momentum seen for much of 2023 amid the uncertain macroeconomic backdrop.
ADP’s private sector payrolls report showed bigger than expected job gains and the weekly jobless claims fell more than expected in the recent reporting week, while S&P Global’s service sector survey showed anemic expansion in December, in line with expectations. Both the labor market reports vouched for the strength of the labor market, casting a cloud on a Fed rate cut.
The major averages opened the session slightly but reversed course in early trading. The broader S&P 500 Index and the 30-stock Dow Industrials hovered mostly above the unchanged but diverged at the close. The Dow ended marginally higher, while the latter settled modestly lower.
Techs once again acted as the biggest drags, and the tech-heavy Nasdaq Composite traded below the unchanged line for the better part of the session before ending moderately lower. Consumer discretionary and energy stocks also pulled back notably.
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