Dow dropped 25 (near session lows), advancers modestly ahead of decliners & NAZ fell 13. The MLP index added 1+ to the 256s & the REIT index was flattish in the 389s. Junk bond funds slid lower & Treasuries continued to be sold, bringing higher yields. Oil gained 1+ to the 73s & gold was up 2 to 2052 (more on both below).
AMJ (Alerian MLP Index tracking fund)
Workers are poised to get smaller raises in 2024 & their annual pay bumps are unlikely to increase again anytime soon amid a cooler job market, labor experts said. US companies plan to give salary increases of 4%, on average, this year, down from 4.4% in 2023, according to a survey by Willis Towers Watson. Similarly, a Mercer poll indicates companies' total salary budgets, which include money for all pay increases, such as raises & promotions, will be 3.8% in 2024, on average. That's down from the 4.1% paid out last year. “We certainly think it will continue to come down,” said Lauren Mason, senior principal in Mercer's career group. “But how much it does is a big open question at this point.” The current forecast isn't paltry by recent historical standards. Raises averaged about 3% a year following the 2008 financial crisis, experts said. Supply & demand of labor is the #1 driver of company decisions regarding raises, said Lori Wisper, who leads Willis Towers Watson’s work & rewards global solutions unit. The demand for labor exploded in the spring of 2021 as the US economy reopened from its pandemic-era doldrums. But the labor supply (i.e., available workers) was limited. Workers had ample opportunity as businesses clamored to fill jobs. Companies raised wages at the fastest pace in decades to compete & attract talent.
Why workers’ raises are smaller in 2024 — and may not go up from here
If demand for gas remains low, motorists will likely see pump prices gradually decrease. The
average price of gas dropped to $3.09 for the week ending Jan 4, a
3¢ drop from the week prior, according to the latest report from AAA. Pump prices on average are 15¢ less than a month ago & 17¢ less than a year ago. "January
is a bit of blah time of year, and gas prices are in the doldrums as
well," AAA spokesperson Andrew Gross said. "Barring some unexpected
shock to the global oil market, gas prices will likely shuffle up and
down a few cents for a while." The West Texas Intermediate (WTI),
an oil price benchmark, increased by $2.32 to $72.70 at the close of
Wed's formal trading session. Gas demand fell from 9.17M to 7.95M barrels per day last week, according to new data from the Energy
Information Administration (EIA). Oil prices climbed this week amid heightened tensions in the Middle East, AAA noted.
Gas prices dip as holiday season ends
The number of Americans filing new claims for jobless benefits dropped to a 2-month low last week, pointing to underlying labor market strength even as demand for workers is easing. With the report from the Labor Dept also showing the number of people on unemployment rolls remained elevated towards the end of Dec, financial markets continued to anticipate that the Federal Reserve would start cutting interest rates in Mar. The gov reported on Wed that job openings fell to a near 3-year low in Nov. Labor market resilience is expected to again shield the economy from recession this year. "The labor market is not too hot and not too cold at the moment," said Christopher Rupkey, chief economist at FWDBONDS in New York. "The total number of Americans on the jobless rolls receiving benefits remains elevated relative to prior year levels, but at the moment there is not enough unemployment to say the economy is on the downward slope to recession." Initial claims for state unemployment benefits dropped 18K to a seasonally adjusted 202K last week, the lowest level since mid-Oct. The forecast called for 216K claims for the latest week. Claims data tend to be volatile around this time of year because of holidays. They have largely bounced around in the lower end of their 194-265K range for 2023.
US weekly jobless claims fall more than expected
Gold closed with a small loss as the $ & treasury yields moved off early gains that followed a report showing the US added more new jobs than expected in Dec. Gold for Feb closed down pennies to settle at $2049 per ounce, trading in a broad range of $2030-2071 during the session. The US reported nonfarm payrolls rose by 216K jobs in Dec, well above the 199K positions added in Nov & ahead of expectations for a rise of 170K. The stronger than expected result is likely to dampen hopes the Federal Reserve will swiftly move to lower interest rates this year. The $ rose sharply following the report but soon fell back, with the ICE dollar index last seen down 0.07 points to 102.36 after earlier touching 103.10. Treasury yields also rose, bearish for gold since it offers no interest. The 2-year note was last seen paying 4.408%, up 2.5 basis points, while the yield on the 10-year note was up 3.7 basis points to 4.035%.
Gold Drops as the Dollar and Yields Jump
West Texas Intermediate (WTI) crude oil closed higher as turmoil & war in the Middle East offset demand concerns following a big rise in US product inventories. WTI crude oil for Feb closed up $1.62 to settle at $73.81 per barrel, while Mar Brent crude, the global benchmark, was last seen up $1.35 to $78.94. The rise comes amid concerns over a widening conflict in the Middle East, as Israel continues to attack the Gaza Strip in its war against Hamas, while Houthi militants continue to attack Red Sea shipping, with Maersk today joining other container shipping lines deciding to avoid the route following drone & missile attacks on their vessels. The closure of a 300K barrel per day Libyan oil field amid protests also aided the rise. While worries over a widening war in a region key to global oil supply support higher prices, demand concerns remain after the Energy Information Administration yesterday reported domestic oil inventories fell by a more than expected 5.5M barrels, but gasoline inventories rose by 10.9M barrels while distillate stocks rose by 10.1M barrels.
WTI Crude Oil Closes Higher as Middle East Tensions Remain High
The stock market started the new year with a little profit taking following the markets' 2 month extraordinary run. The Dow finished the week with a decline of 223. With all that's going on around the globe, headwinds will get more attention.Dow Jones Industrials
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