Daily market snapshot

Published December 4, 2024
 Woman on couch looking at laptop

Wednesday 12/4/2024 p.m.

  • Stocks finish mixed, with economic data in focus: U.S. equity markets finished higher Wednesday, while the TSX was modestly lower, on a busy day from a U.S. economic data standpoint. The U.S. ADP private-employment survey showed private employers added 146,000 jobs in November, representing healthy job growth, but it was below the October reading of 184,000.* Additionally, the ISM services PMI for November fell to 52.1 compared with the prior reading of 56, signaling the services sector of the U.S. economy continues to expand, albeit at a more modest pace than the prior month.* Equity-market leadership was narrow, with growth sectors of the S&P 500 such as technology, communication services and consumer discretionary outperforming, while most other sectors finished flat to lower. Overseas, European markets traded mostly higher despite ongoing political uncertainty in France, while Asian markets were mixed overnight. On the corporate front, shares of Salesforce were higher by over 10% following the company's earnings results after the market close yesterday, which showed sales for the quarter were slightly better than analysts expected.* Bond yields closed lower, with the 10-year U.S. Treasury yield falling to around 4.18% and the 10-year GoC yield declining to 3.09%.*
  • Jobs data in focus this week: A busy week of labour-market data continued today with the release of the U.S. ADP Employment survey for November. Today's report showed U.S. private employers added 146,000 jobs in November, modestly below expectations for a gain of 158,000 and below last month's downwardly revised reading of 184,000.* Economically sensitive segments of the economy showed the weakest job growth, with manufacturing jobs contracting by 26,000 and small businesses (those with between 1-50 employees) shedding 17,000 jobs.** Meanwhile, large establishments (those with 500+ employees) and services industries, such as education and health services, produced the strongest gains.** Today's report follows yesterday's better-than-expected U.S. JOLTS job openings report, which showed job openings increased to 7.7 million in October, 372,000 higher than the prior month and the biggest monthly increase in more than a year.* We'd view this week's data as evidence that labour-market conditions continue to normalize from historically tight levels but remain healthy overall. Perhaps this week's most anticipated releases will be the domestic labour-force survey and U.S. nonfarm-payrolls report on Friday. Expectations are for domestic employment to have grown by 20,000 in November while the unemployment rate is expected to tick higher to 6.6%.* In the U.S., expectations are for nonfarm payrolls to rise by 215,000, well above the prior month's reading of 12,000, which was negatively impacted by the Boeing machinist strike and hurricanes Helene and Milton.* The U.S. unemployment rate is expected to remain unchanged at 4.1%.*
  • Overseas politics in focus: Overseas politics remain in the headlines, with the French National Assembly voting to remove the government of Michel Barnier.* The move follows the former prime minister's attempt to push through amendments to the budget without seeking parliamentary approval. A new prime minister will need to be appointed, and the government could be forced to rely on emergency financial measures to roll over government spending limits from 2024 until a new budget is created.* The political uncertainty has surfaced mainly through bond markets, with the spread between the 10-year French and 10-year German government bond yields rising to its highest in more than 10 years, reflecting the uncertain situation in France.* French equity markets looked through the turbulence, with the CAC index finishing higher today.* In addition to the uncertainty in France, the South Korean president declared martial law before subsequently reversing the order and now faces the possibility of impeachment. The Korean KOSPI Index finished sharply lower overnight in response to the instability.*

Brock Weimer, CFA
Investment Strategy

Source: *FactSet **ADP Private Employment Report for November

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