MARKET REPORT

Review:
– NFP:
– Exp +170 ‘actual’ 216K, above all but 2 estimates and the highest in 4 months, severely reducing the case for March rate cut
– Rate Exp 3.7% Act 3.7%
– Hourly earnings Exp 3.9% Act 4.1%
– October revised down 45K from 150K to 105K
– November revised down 26K from 199K to 173K
10 of past 11 months revised lower
– The # full-time jobs plunged by 1.531m to 133.2m, biggest monthly drop since the record covid crash.
– since Feb ‘23, US not added a single full-time job (in fact it has lost 34,000), while adding 774k part-time
number of multiple jobholders: Dec surged by 222K. At 8.565 million highest print on record
all job creation in the past 4 years has been exclusively for foreign-born workers, but there has been zero job-creation for native born workers since 2018

– ISM Services Dec 50.6 Prev 52.7 52.5 exp, lowest since May ‘23
– Factory Orders 2.6% MoM +2.4% exp

– Gold $40 Rge closed flat.
– US Equities give back post number gains (on realization they’re Bull****?)
– Crude up 2.5%
– Crypto -0.75/-1.5%

DOLLAR  closed flat:
– AUD up 67.17                     +0.15% (66.43 – 67.50) close up smalls
– EUR up 91.37                    +0.04% (91.88 – 90.93) close mid rge
– GPB up 127.22                   +0.33% (126.19 – 127.68) close mid to upper rge
– JPY up 144.72                     +0.11% (146 – 143.85) close mid rge
GOLD flat $2051                 +UNCH (2031 – 2071) close mid rgr
DOW/ES/ND:                        37688 UNCH, 4730 UNCH, 16444 UNCH
CRYPTO: BTC/ETH:              -225/-0.5% 44000, -31/-1.4% 2245
CRUDE:                                    +$1.67/2.31% $73.86

Upcoming:

A nap

Next Week:

CPI releases from the US and China
US earnings season gets underway

MAJORS:

DX:
On the surface things are humming along but a more than cursory look at the breakdown of the data indicates the press headlines are just spin.
the Index had a whip-saw day trading higher over the headlines then dumping on further analysis.
It did regain its losses and close unch.
Dollar was a touch weaker vs AUS, touch stronger vs EUR, touch weaker vs Pound and touch strong vs YEN.
A mixed bag of nothing.

Where too from here? Believe the spin or the data, which one will it be? Time will tell.
No call on direction.

1-

AUD:
Standard story, Dollar strengthens over headline, losses upon breakdown. I think we could see some flushing around 67 for a little with no clear direction. I’d be surprised to see a 65 handle hold. Value low 66’s. don’t think we’ll get much except a 67 wash.

66.57 – 68.17    (7’s my lucky number)

EUR:

You know the drill. Higher over number, weaker on the breakdown, arvo bounce.
I love 91 as support here but fundamentally the dollar should have puked upon breakdown and stayed puked. So 91 a hold? Perhaps the market needs more time to digest and futher dollar weakness will flow through. But I don’t think so. I think we’ll get a Hawkish Fed post this with ‘elevated longer’ blah blah and the Dollar has (for the while) found a floor.

91 to hold. FU MS.

91.13 – 92.12

POUND
:
Weak rally flat.
As with Euro comments, thinking Dollar found a base, at least until it hasn’t. 128 should hold as we move back to a 125+ handle is my humble opine.

128 to hold. Dollar found floor.

125.87 – 127.57 (7’s my lucky….)

YEN:
Higher post, come off, wally to settle mid.
Expect some washing around 145 before making a base. We’ve come a ways (back and forth) and I would expect a little to and fro around the 145 handle until things settle.

Longer term 145 a base.

No range.

GOLD & SILVER:

Flip side of the dollar’s move. Sold off on Headlines, rally on inspection, drift to unch on close.
The market just doesn’t know how to digest these data with lots of hand sitting. A range today of 2030-2070, +$20, -$20.

Silver faired slightly better hitting 23.70 at one point closing up 0.75% with $23 again being tested and held. If Gold doesn’t move a spec long close to $23 is value (Gold $2040+).

Longer term zero call. Flip a coin.

EQUITIES:
US:
– SPX +0.18% 4,697
– NDX +0.15% 16,305
– DJI +0.07% 37,466
– RUT -0.34% 1,951

EUR:
– DAX -0.14% 16,594.21
– FTSE 100: -0.43% 7,689.61
– CAC 40 -0.40% 7,420.69
– Euro Stoxx 50 -0.24% 4,463.45

SECTORS (S to W): Financials +0.53%, Utilities +0.39%, Communication Services +0.34%, Consumer Discretionary +0.29%, Materials +0.21%, Industrials +0.21%, Technology +0.15%, Energy +0.07%, Health -0.02%, Real Estate -0.19%, Consumer Staples -0.24%.

Apple -0.5%: Supplier Foxconn reported December sales -26.89% Y/Y; January-December 2023 sales -6.98% Y/Y. Foxconn said Q4 revenue was slower due to flattish market demand. In other news, US moves closer to filing antitrust case against Apple’s strategies to protect the dominance of the iPhone as soon as the first half of 2024, according to NYT.
Tesla -0.2%: China’s Market Regulator said it recalled 1.62mln vehicles, including Model S, Model X, and Models 3 and Y.
Costco +1.2%: December comparable sales rose 9.9% Y/Y to USD 26.15bln driven by its e-commerce segment.

OIL:
Oil prices were firmer on Friday amid the above forecast NFP report and the continued risk of a widening Israel war. WTI and Brent futures hit their peaks of USD 74.24/bbl and 79.26/bbl, respectively, in the NY morning, with the upside coming in wake of the NFP report but also amid some rhetoric from Hezbollah chief Nasrallah who urged a response to the assassination in Beirut earlier this week. Meanwhile, the supply risk in the region was highlighted by Maersk (MAERSKB DC) announcing it would divert all vessels away from the Red Sea for the foreseeable future. However, the concerns on oil transit in the Red Sea may be somewhat overdone, with an FT article noting, “Oil markets have been less affected by the disruptions, with many companies still willing to traverse the Red Sea route, according to Vortexa, despite facing higher insurance costs.” Elsewhere, Reuters reported the US’ largest refinery, Motiva’s Port Arthur (626k BPD) in Texas, is to shut its large CDU and coker for work early next week and is expected to take 45 days. In the latest week, Baker Hughes’ rig count saw US oil rigs up one to 501 and Nat Gas rigs down two to 118, leaving the total down one to 621.
Oil report courtesy of zerohedge.com

BOND YIELDS:

1 Mo: 5.388 +0.005 6Mo 5.261 -0.013 1yr 4.855 +0.004 5yr 4.014 +0.041 10yr 4.05 +0.059 and the 30yr 4.203 +0.068
2’s/10’s -0.34

CRYPTO
Ran out of time to report on Crypto, kindly request you forgive your humble servant.

Have an enjoyable and safe weekend all.

Best of luck out there. Let the market come to you.

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