Sign outside Wegmans in New York.
Adam Jeffery | CNBC
This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open informs investors about everything they need to know, no matter where they are. Like what you see? You can subscribe here.
What you need to know today
Job explosion in December
US nonfarm payrolls up 256,000 in December, up from 212,000 in November and above the 155,000 forecast from the Dow Jones Consensus, US Bureau of Labor Statistics he reported on Friday. The unemployment rate fell to 4.1% from 4.2% in November. Economists expected the rate to remain the same in December.
US markets in the red for 2025
US markets fell on friday after a December jobs report came out that beat expectations, sending major US indexes into the red for the year. Asia-Pacific stocks fell on mondaytracking Wall Street’s losses. Despite China reporting a surprise increase in exports in December, the CSI 300 lost about 0.5%, extending losses on Friday when it closed at its lowest level since September 2024.
Surprising jump in Chinese exports
Chinese exports increased by 10.7 percent in December in US dollars from the previous year, data from China customs authority showed Monday. That was higher than the 7.3% growth expected in a Reuters poll and the 6.7% increase in November. Imports rose 1.0%, reversing the decline of the previous two months. But a potential U.S. tariff hike could slow trade.
Why Meta had to ‘kneel before Trump’
It’s a target announcement on Tuesday that it would end third-party fact-checking was seen as an attempt to appease US President-elect Donald Trump. Here’s why Meta had to “kneel before Trump”, in the words of the former vice president of Facebook. Separately, CEO Mark Zuckerberg was interviewed on Friday at “The Joe Rogan Experience,” in which he slammed Apple for failed innovation efforts.
TikTok could be banned in the US this week
The U.S. Supreme Court on Friday heard oral arguments in the case involving the future of TikTok in the United States. The judges generally seemed unconvinced according to TikTok’s main argument that TikTok ban violates the free speech rights of its millions of US users, meaning the app could disappear from app stores as early as this week.
[PRO] Inflation and bank earnings report for the week
The US consumer price index for December is released on Wednesday. It will show if inflationary pressures continue to prevail on the economy and markets, especially after December’s nonfarm payrolls were surprisingly strong. Large banks such as JPMorgan Chase, Goldman Sachs and Morgan Stanley report earnings in the second half of the week.
Conclusion
The number of new jobs in December was 100,000 higher than expected by the Dow Jones consensus estimates.
Investors are concerned that the Fed may remain intransigent in response to a hot labor market. Market implied probability of only one cut this year increased to 68.5% after the affairs report, according to CME Group’s FedWatch gauge.
Bond yields, already elevated in recent weeks, jumped further after the jobs report. The 10-year Treasury yield hit your own highest level since November 2023.
The market sell-off following the release of the jobs report was swift and not unexpected. The S&P 500 it fell 1.54 percent Dow Jones Industrial Average fell 1.63% and Nasdaq Composite lost 1.63 percent. All major indices are now in negative territory for 2025.
Good news is bad news for investors, as the cliché goes.
But we need to remember that circumstances are different now than they were during the peak of inflation.
The US central bank may not be as concerned about a strong labor market this time around. On the contrary, strong job growth is likely reassuring, given that concerns about the employment rate were one of the reasons the Fed decided to go jumbo Rate cut of 50 basis points in September.
“You’ll never hear me complain that we have 250,000 jobs,” Chicago Fed President Austan Goolsbee said. he said on CNBC’s “Squawk on the Street.” Goolsbee also noted that inflation over the past six months has been around 1.9%, or slightly below the Fed’s target.
In times when inflation is lower, high employment numbers are a sign of a resilient economy.
And economic growth ultimately “means better earnings potential, less recession risk, and that’s really going to dictate longer-term returns versus the selloff in today’s market,” said Adam Turnquist, chief technical strategist at LPL Financial.
In other words, good news can only be good news if investors look beyond the immediate present.
— CNBC’s Jeff Cox, Michael Santoli, Pia Singh and Sean Conlon contributed to this report.
