Non-Farm Jobs Crashed Market But Not Gold.

On Fri, 10 Jan 2025, US stocks took a big tumble after a much hotter-than-expected jobs report sent treasury yields spiking.

It also signaled that the Fed will very likely, halt its rate-cutting campaign in the near term.

The US economy added many more jobs than anticipated in December 2024, raising concerns over whether the Fed will lower rates as much as investors hope.

US non farm payroll for December 2024

Non-Farm Payroll.

US payroll grew by 256,000 jobs vs economists’ expectations of 155,000 jobs (polled by Dow Jones) vs November’s downwards revised 212,000 jobs. (see above)

The non-farm payroll number is amongst the most scrutinized economic data in markets, because they help shape expectations for monetary policy.

Unemployment Rate.

US unemployment rate has been hovering between the 4.0 & 4.2 banding since June 2024.

For December 2024, it was projected to remain status quo at 4.2%.

However, actuals fell by -0.1% to 4.1% for the month. (see above)

By the time market called it a week :

DJIA: -1.63% (-696.75 to 41,938.45).
S&P 500: -1.54% (-91.21 to 5,827.04).
Nasdaq: -1.63% (-317.25 to 19,161.63).

It’s a case of déjà vu, harking back to Tue, 07 Jan 2025 when the first job report (US’s JOLTs) was released.

On Tuesday, all 3 composite indexes tumbled too. (see below)

US market performance on 07 Jan 2025

Comparatively speaking:

Both Dow Jones and S&P 500, 7 Jan 2024’s fall were less severe than Friday’s.
On the other hand, Nasdaq’s 7 Jan 2024 fall was more pronounced, at -1.89%.

US - 10-year Treasury rate

Treasury Yields.

Benchmark Treasury yields jumped after non-farm jobs data:

(1) 10-year yield closed at 4.772%, the highest level since November 2023. It has been climbing steadily for the past few days.

Tue, 07 Jan 2025 - 4.684%.
Wed, 08 Jan 2025 - 4.691%.
Thu, 09 Jan 2025 - 4.680% (abbreviated trading session, to honor former President Jimmy Carter).

(2) The 30-year equivalent touched 5% before closing at 4.962%. Similarly, the 30-year yield has been climbing too for the past few days:

Tue, 07 Jan 2025 - 4.91%.
Wed, 08 Jan 2025 - 4.91%.
Thu, 09 Jan 2025 - 4.920%.

CME Fed Watch Tool

With the latest set of jobs reports out, traders :

Give 97% odds the Fed will keep interest rate status quo during its Jan 28-29 meeting. (see above)
Give 56.3% odds the Fed will continue to keep interest rate unchanged during its Mar 18-19 meeting (see above).

As said, market is bracing for a no interest cut by the Fed in Q1 2025.

Too early to definitively predict for Q2 2025, given a new president and party is going to implement their kind of policies that will shape or affect the US economy, further down the road.

Gold Resiliency.

On 02 Jan 2025, I have posted about exploring Gold as an alternate investment. (click here ! for details, Repost to share ok).

To date, it is one of my least-read posts in 2025. I guessed most Tiger-investors are more vested in equities and maybe even cryptocurrency.

However, looking at how market has behaved in the past few sessions and unsure if this will be how market is going to behave for remaining 11 months, I will dig deeper into this metal & maybe silver as well.

What’s The Reasoning?

On Fri, 10 Jan 2025, gold price rebounded off day’s lows - extending its rally for the 4th consecutive day as traders shrugged off a strong US Nonfarm Payrolls report. (see above)

This tempered the Fed’s concerns about the labour market, but not so much inflation as some officials acknowledged.

Bullion initially fell sharply after the US Bureau of Labor Statistics (BLS) released the December 2024 jobs report.

It recovered when market participants digested the data, that reassured Fed officials that labour market remains healthy, leaving them to continue to tackle the sticky inflation

Gold’s uptrend remains in place as the yellow metal has carved successive series of higher highs and higher lows, with traders eyeing the $2,700 mark.

Momentum is strongly tilted to the upside as seen on the Relative Strength Index (RSI) indicator, that shows bulls are in charge.

What’s Next.

(1) Economic reports.

For week beginning 13 Jan 2025, the monthly cycle of inflation data and other economic reports are going to affect market behaviour all over again.

Important reports out this week include:

Tues, 14 Jan 2025 - US Producer price index (PPI).
Wed, 15 Jan 2025 - Consumer price index (CPI).
Thu, 16 Jan 2025 - US Retail sales.

Although not an economic report per se, the Fed will also be releasing its Beige Book on Tue, 14 Jan 2025 - 2 weeks ahead of its FOMC’s January 2025 meeting, as scheduled.

Market will pay attention because it contains the 12 district banks’ compilation on economic conditions in their respective regions.

(2) Quarterly earnings report.

Earnings season “officially” kickstart from the week of 13 January 2024.

Firing off the first salvo, will be the big financial institutions, along with some other mega cap companies.

These earnings results together with the economic reports will either (a) boost the current “low” market sentiments or (b) drag it down even further. (am = before market opens, pm = after market closed)

(1) Wed, 15 Jan 2025.

$JPMorgan Chase(JPM)$ - am.
$Wells Fargo(WFC)$ - am.
$BlackRock(BLK)$ - am.
Citigroup(C)$ - am.

(2) Thu, 16 Jan 2025.

$Bank of America(BAC)$ - am.
$Morgan Stanley(MS)$ - am.
Taiwan Semiconductor Mfg. Ltd(TSM)$ - pm.
United Health Group(UNH)$. am. Long term investors will need to know what’s next to this pedigree healthcare stock, with its CEO murdered.

No significant listed companies are announcing its quarterly earnings on Fri, 17 Jan 2025.

Latest economic reports & quarterly earnings mark the end of the Biden administration. US economy is “restarting” from square one all over again, with good & bad policies discarded and new policies set to do good or further damage US and its stock market.

Must Read: Click on below titles to access. Repost to share, Like as encouragement ok. Thanks.

Do you think core CPI inflation will remain stagnant like November’s or cool off ?
Do you think the Banks will hand in another set of mixed earnings or do better?

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