Markets slip from records as 2024's rally takes a pause

Dow declined 150, decliners over advancers 2-1 & NAZ crawled up 13.  The MLP index fell 2 to 311 & the REIT index was off 1+ to the 428s.  Junk bond funds inched higher & Treasuries had a little selling, which increased yields modestly (more below).  Oil added 1+ to the 69s & gold went up 5 to 2664.

Dow Jones Industrials

Available jobs rose in Oct while hiring fell during a month in which payrolls growth hit their lowest level in nearly 4 years, the Bureau of Labor Statistics (BLS) reported.  Job openings totaled 7.74M on the month, up 372K from Sep & more than the estimate for 7.5M, the BLS said in its Job Openings & Labor Turnover Survey.  The rate of openings as a share of the labor force rose to 4.6% from 4.4%.  That brought the ratio of available positions to unemployment workers up to 1.1, about ½ of where it was during the peak of a massive gap between supply & demand in 2022.  Hiring also tailed off at a time when the labor market was disrupted by violent storms in the Southeast as well as 2 major labor strikes involving dock workers & Boeing (BA), a Dow stock.  Hires totaled 5.3M, down 269K on the month, lowering the hiring rate to 3.3%, a decline of 0.2 percentage point.  Layoffs, though, fell to 1.63M, a decrease of 169K from Sep.  The data comes for a month in which the BLS reported nonfarm payroll growth of just 12K, the worst month since Dec 2020.  The Federal Reserve watches the JOLTS report closely for signs of tightness or slack in the labor market.  Markets expect the Fed to lower its benchmark borrowing rate by a qtr percentage point when it meets later this month, in part an effort to head off any potential weakness in the labor market.

Job openings jumped and hiring slumped in October, key labor report for the Fed shows

South Korean stocks dropped in the US after Pres Yoon Suk Yeol invoked emergency powers & declared martial law, raising fear of instability in the world's 13th largest economy.  The iShares MSCI South Korea ETF, which tracks more than 90 large & mid-sized companies in South Korea, tumbled 6% to hit a 52-week low.  The pres accused opposition parties of sympathizing with North Korea & controlling parliament.  Yoon did not specify how martial law, a temporary rule by military authorities in a time of emergency, would affect governance & democracy in the country.  Under the martial law declaration, all political activities and acts that “incite social disorder” are prohibited.  This is the first time since 1980 a South Korean leader has issued a martial law declaration.  The Korea Exchange announced it would hold an emergency meeting “to prepare response measures” &  later decide whether the market would open tomorrow.  The $ jumped 1.9% against the South Korean won.

South Korean stocks rocked in U.S. trading after martial law declared

The benchmark US 10-year Treasury yield edged lower as investors await data that will offer insights about the strength of the US economy.  The 10-year Treasury yield added 2 basis point to 4.215% while the yield on the 2-year Treasury dipped 1 basis point to trade at 4.19%.  Yields & prices move in opposite directions & 1 basis point equals 0.01%.  Investors will also scrutinize comments from Fed Governor Adriana Kugler & Chicago Fed Pres Austan Goolsbee for hints on interest rate policy.  The week's major economic release is the Nov jobs report, which will be published Fri & is expected to show that the US economy added 214K jobs last month, up from 12K jobs in Oct.  The unemployment rate is expected to land at 4.2%, up from 4.1% in the prior month.  The jobs report is important for investors as it will be the last major look at the labor market before the Fed's Dec 17-18 meeting, where it will decide on how much to cut interest rates.

10-year Treasury yield edges higher as investors await data, Fed speeches

Stocks drifted near all-time highs as investors weigh fresh jobs data & waited for new comments to cement or dent growing hopes for future interest rate cuts.  JOLTS serves as the first in a wave of key data this week that culminates in Fri's all-important monthly US payrolls report.  The unrest in South Korea needs to be watched closely.