Dow went up 141, advancers over decliners better than 3-1 & NAZ gained 55. The MLP index advanced 4+ to the 257s & the REIT index added 2+ to the 385s. Junk bond funds were higher along with stocks & Treasuries rose which lowered yields. Oil added 1+ to the 74s (more below) & gold was off 5 to 2024.
AMJ (Alerian MLP Index tracking fund)
The pace of job cuts by US employers accelerated in 2023, with the number of layoffs surging 98% compared with the previous year. That is according to a new report published by Challenger, Gray & Christmas, which found that companies planned 721K job cuts last year, a substantial increase from the 363K layoffs reported in 2022. The problem could get worse in 2024 as the labor market continues to soften in the face of high interest rates & stubborn inflation. "Labor costs are high," said Andy Challenger, senior VP of Challenger, Gray & Christmas. "Employers are still extremely cautious and in cost-cutting mode heading into 2024, so the hiring process will likely slow for many job-seekers and cuts will continue in the first quarter." Technology bore the brunt of the job losses in 2023, with the industry shedding 168K employees, a stunning 73% increase from the previous year. The total falls slightly short of the annual record of 168K cuts announced for the sector in 2001. "The tech sector will continue to be impacted by the onset of AI, mergers and acquisitions, and realigning of resources and talent," Challenger said. Retail companies also accounted for a large swath of the job cuts last year, slashing 79K positions. That marks a 274% increase from the layoffs announced in the sector during the same period one year prior. Challenger said retailers need to "be on their toes" this year, even though many companies exercised caution & flexibility in their hiring. Health care & products manufacturers, including hospitals, also cut a significant number of jobs. They eliminated 58K positions in 2023, a 91% increase from the layoffs announced in 2022. The top reason cited for job cuts last year was deteriorating market & economic conditions as the country grappled with still-high inflation, a sharp rise in interest rates & ongoing geopolitical tensions. Companies also blamed stores closing, bankruptcy & artificial intelligence for the layoffs.
Layoffs surged 98% in 2023; It could get worse this year
Treasury yields pulled back as investors geared up for another big week of economic data. The yield on the benchmark 10-year Treasury note was down 5 basis points at 4.094%. Last week, it reached levels last seen in Dec. The yield on the 2-year Treasury bond slid 2 basis points to 4.385. Yields move inversely to prices. The moves come as markets try to gauge when the Federal Reserve will begin cutting interest rates, which will be a key determinant of the trajectory of the economy & markets this year. 2 significant pieces of economic data are on the slate this week, with a preliminary 4th-qtr GDP growth figure due Thurs & the Commerce Dept's closely-watched PCE price index for Dec on Fri. The forecast expects the economy to have grown by 1.7% for the final 3 months of 2023, the slowest rate since the 0.6% decline registered in the 2nd qtr of 2022. The forecast for core PCE prices, which exclude the volatile food & energy components, is 0.2% growth for the month & 3% for the full year.
Treasury yields retreat ahead of big week for economic data
Oil prices rose as investors monitored the war in Ukraine & conflict in the Middle East for any potential impact on crude supplies. The West Texas Intermediate futures contract for Feb gained $1.36 (1.8%) to trade at $74.77 a barrel & the Brent contract for Mar rose $1.07 (1.4%) to trade at $79.63 a barrel. Crude prices rose after Russian energy infrastructure came under attack over the weekend. Ukrainian drones struck a major fuel processing & export facility near St Petersburg, a source said. The Ust-Luga facility processes gas condensate into jet fuel & gasoil among other products. In the Middle East, several US personnel are being evaluated for “traumatic brain injuries” after militants allied with Iran attacked an airbase in Iraq on Sat with ballistic missiles & rockets, according to US Central Command. US forces stationed in Iraq & Syria have repeatedly come under attack by Iran-allied militants since Israel's military operation in Gaza began. Houthi militants, also allied with Iran, have continued their attacks on shipping thru the Red Sea, a crucial trade artery, despite US airstrikes. The attacks have stoked worries that the US & Iran are getting drawn into a regional conflict that could disrupt oil supplies. Libya's National Oil Corp, meanwhile, resumed full production at the Sharara oilfield yesterday after protests shut down output for 2 weeks. Sharara is one of Libya's largest oilfields with capacity to pump 300K barrels per day. Traders have generally been more focused on the supply & demand outlook than geopolitical risk. The Intl Energy Agency has a bearish forecast for 2024, projecting that production outside OPEC, particularly in the US, will rise by 1.5M barrels per day, more than covering global demand growth of 1.2M barrels per day. OPEC, on the other hand, has presented a stronger outlook with oil demand forecast to grow by 2.2M barrels per day, while production outside OPEC will grow by 1.3M barrels per day.
Oil prices rise as investors monitor Ukraine war, Middle East conflict
While today's news was bearish investors are buying with hopes earnings will be good & expectations are for interest rate cuts this year. Federal Reserve officials whose comments have buffeted stocks will stay quiet ahead of policymakers' meeting next week.Dow Jones Industrials
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