Strong employment data unexpectedly dampens expectations of interest rate cuts, causing a plunge in US bonds and a decline in inflation expectations. US stocks open low and rise high, marking a six-week consecutive increase.

The Weighty Employment Report shows that the US labor market is more robust and resilient than expected on Wall Street: non-farm employment in November increased by 199,000, surpassing expectations. The unemployment rate did not stabilize as expected, but further declined to 3.7%. The year-on-year wage growth rate slowed slightly as expected to 4.0%, but the MoM growth rate exceeded expectations, reaching 0.4%, the highest growth rate this year.

Commentators say that while the non-farm employment data temporarily reduces the possibility of an economic recession in the United States, it has dealt a blow to market expectations of a rate cut by the Federal Reserve next year and the earliest action to turn dovish in March. This has led to an increase in expectations that the Fed will maintain high interest rates for a longer period.

After the release of the employment report, US Treasury prices plummeted and yields rose, with most increasing by more than 10 basis points. The yield on the benchmark 10-year US Treasury quickly rose above 4.20%, far from the three-month low set the day before, and the yield on the two-year US Treasury, which is sensitive to interest rates, briefly rose above 4.70%, reaching a high for the month. The US dollar index rapidly expanded its gains, reaching a three-week high. US stocks opened lower.

Good news came from the University of Michigan survey released afterwards. The survey showed that the preliminary consumer confidence index for December rebounded much higher than expected, and consumers' inflation expectations for the next year unexpectedly dropped to the lowest level since March 2021, falling sharply from 4.5% in November to 3.1%, with expectations only slowing to 4.3%.

Some commentators say that the employment report initially raised concerns about the overheating of the economy and the difficulty of bringing inflation down to the Fed's target. However, on the other hand, the data also support the view that the Fed can achieve a soft landing. The University of Michigan survey results boosted market confidence in a soft landing.

US stocks withstood the pressure of rate cut expectations and turned higher in early trading, led by energy stocks supported by the rebound in crude oil. After the announcement of consumer inflation expectations, the US stock market maintained its upward momentum, with the S&P and Dow Jones indices locking in gains for the whole week, along with the Nasdaq's continuous weekly gains since the end of October. The US dollar index gave back some of its gains but maintained its rebound throughout the day, achieving its first weekly gain in a month thanks to Friday's rebound. US bond yields fell slightly in the short term but quickly rebounded, with the two-year US Treasury yield reaching a new high since the end of last month and yields rising for the whole week.

As the US dollar rebounded, non-US currencies fell across the board. After the release of the US employment report, the euro continued its downward trend since mid-November, posting its worst weekly performance in nearly seven months amid intensified expectations of a rate cut by the European Central Bank next year. The Japanese yen, which had risen sharply after a Bank of Japan official hinted at the end of negative interest rates, reversed its course during trading on Thursday and fell nearly 2% from its four-month high earlier on Friday.

In the commodity market, international crude oil rebounded and closed higher for the first time in a week since the OPEC+ meeting, breaking out of the five-month low it had been hitting for several days. Some analysts believe that Friday's rebound was partly due to a joint announcement by Russian President Putin and Saudi Crown Prince Salman after their meeting, emphasizing the importance of continued cooperation and the need for all OPEC+ agreement countries to comply with the agreement. Despite the impact of unexpected increase in gasoline inventories in the United States and a 9% decrease in China's crude oil imports in November, crude oil continued to decline throughout the week, experiencing the longest consecutive decline in five years since late October. Following the US employment report, gold accelerated its decline from historical highs under the pressure of rising US dollar and bond yields. Spot gold fell below the $2,000 mark for the first time in two weeks, while gold futures fell to their lowest level in nearly two weeks, marking the first weekly decline in a month.

The three major US stock indexes opened lower, hitting new daily lows at the beginning of the session, but later turned higher. The Dow Jones Industrial Average, which initially fell nearly 56 points, quickly rebounded and rose over 100 points in early trading. The S&P 500 index initially fell nearly 0.3%, and the Nasdaq Composite index initially fell over 0.5%, but both turned higher after about half an hour of trading. The three major indexes turned lower towards the end of the morning session, but rebounded in the afternoon and continued to rise, hitting new daily highs in the final moments of trading, ultimately closing higher for the second consecutive day.

The Nasdaq rose 0.45% to close at 14,403.97 points, reaching a new closing high since April 4th of last year. The S&P 500 rose 0.41% to close at 4,604.37 points, closing above 4,600 points for the first time since March 30th of last year. The Dow Jones Industrial Average rose 130.49 points, or 0.36%, to close at 36,247.87 points, setting a new closing high since January 12th of last year, which was also the previous Friday.

The S&P 500 hits a new high since March of last year The Nasdaq hits a new high since January of last year.

Small-cap stocks, mainly value stocks, represented by the Russell 2000, rose 0.67%, marking a two-day consecutive increase and approaching the closing high since September 1st set on Monday. The Nasdaq 100, dominated by technology stocks, rose 0.39%, hitting a two-year high. The Nasdaq Technology Market Cap Weighted Index (NDXTMC), which measures the performance of technology stocks in the Nasdaq 100, rose 0.65%, marking a two-week consecutive increase to a high since November 20th and a cumulative increase of 1.03% for the week, marking a six-week consecutive increase.

The major US stock indexes continued to rise collectively this week. The Nasdaq rose 0.69%, the Nasdaq 100 rose 0.54%, the S&P 500 rose 0.21%, and the Dow rose 0.01%, marking a six-week consecutive increase and the longest weekly consecutive increase since 2019. The Russell 2000 rose 0.98%, marking a four-week consecutive increase.

The major US stock indexes showed an overall cumulative increase for the week, with small-cap stocks performing the best and the Dow performing the worst. In the S&P 500, four major sectors saw declines on Thursday. Consumer staples fell nearly 0.7%, utilities and interest rate-sensitive real estate dropped over 0.2%, and communication services fell nearly 0.2%. Among the seven sectors that saw gains, the energy sector led the way with a rise of over 1%, rebounding after three consecutive days of declines. The IT sector, which includes chip stocks, followed closely behind with a 0.9% increase, while other sectors saw gains of less than 0.5%.

This week, six sectors experienced cumulative declines, with energy performing the worst, falling over 3%. The sector as a whole dropped 1.7%, consumer staples fell over 1%, and real estate, utilities, and finance saw declines ranging from 0.1% to 0.4%. Among the five sectors that saw cumulative gains, communication services and non-essential consumer goods rose over 1%.

Most leading technology stocks saw intraday gains, with Tesla rising nearly 0.5% and experiencing a four-day consecutive increase. It reached a new high since November 29th and saw a cumulative increase of 2.1% this week. Among the FAANMG six major technology stocks, Meta, the parent company of Facebook, rose nearly 1.9% and reached a new high since November 28th for two consecutive days. Apple rose over 0.7% and reached a new high since July 31st for two consecutive days. Microsoft rose nearly 0.6%, Netflix rose nearly 0.4%, and Amazon rose nearly 0.4%. However, Alphabet, the parent company of Google, which saw a significant increase of over 5% on Thursday, fell over 2% at the opening and closed with a decline of 1.4%, falling from the high it reached on November 28th after the rebound on Thursday.

Overall, chip stocks turned positive in early trading and saw two consecutive days of gains. The Philadelphia Semiconductor Index and the semiconductor industry ETF SOXX both rose by about 0.8%, reaching new highs since November 20th for two consecutive days. Among individual stocks, Arm rose over 7%, Nvidia rose nearly 2%, leading the gains among the seven major technology stocks, and saw a cumulative increase of 1.6% this week. Intel and Micron Technology rose over 1%, and Taiwan Semiconductor, which announced a 7.5% year-on-year decline in November sales, also rose over 1%. AMD, which saw a significant increase of nearly 10% after announcing its AI chip on Thursday, rose 0.4%. Broadcom, which initially fell over 1% during trading hours after announcing its fiscal year 2024 revenue guidance below expectations, turned positive and closed with a gain of over 2%.

Most AI concept stocks followed the market's upward trend. After falling over 10% following its earnings report on Thursday, C3.ai rose over 8%. BigBear.ai rose over 6%, Palantir rose over 3%, and Adobe rose 0.2%. However, SoundHound.ai initially fell but closed with a decline of 0.5%.

Overall, popular Chinese concept stocks saw a decline. The Nasdaq Golden Dragon China Index (HXC) fell over 0.7%, marking a two-day consecutive decline to its lowest level since November 1st, with a cumulative decline of nearly 4% this week. New energy vehicle companies continued to decline, with XPeng Motors falling over 7% and NIO falling over 1% at the close.

In terms of individual stocks, at the close, iQiyi fell more than 3%, Baidu fell 2%, JD.com and Tencent fell more than 1%, Pinduoduo fell nearly 1%, Bilibili fell nearly 0.6%, Alibaba fell nearly 0.3%, and NetEase fell 0.2%; while Douyu rose more than 7%.

Among the stocks that announced their earnings reports, Lululemon, a sports and leisure clothing manufacturer, fell more than 3% at the beginning of trading after announcing lower-than-expected sales guidance for the holiday shopping season and lowering its full-year guidance, but rebounded and closed up 5.4%; Docusign, an electronic signature software company, which exceeded expectations in terms of third-quarter earnings and fourth-quarter sales guidance, rose 4.8% after an initial decline; RH, a furniture and home goods retailer, which had lower-than-expected quarterly and annual revenue guidance, fell 14%; despite exceeding expectations in terms of third-quarter revenue and unexpectedly achieving EPS profitability, software company HashiCorp still fell 16.4%.

Among the stocks with significant fluctuations, Carrier Global Corp, an industrial machinery company, rose more than 5% during trading and closed up 4.5% after announcing the sale of its security company to Honeywell, while Honeywell initially fell more than 2% and closed down 1.6%.

In Europe, the final value of Germany's November CPI inflation, which was announced on Friday and was in line with expectations, eased expectations of the European Central Bank's interest rate peak, and together with US data, boosted risk appetite and led to a rebound in the pan-European stock index, which had stopped after two consecutive gains on Thursday. The Stoxx Europe 600 index reached its highest closing level since February 9 last year. The blue-chip Stoxx 50 index hit a 16-year high since 2007. Major European national stock indexes also rebounded on Friday, with the German stock index hitting a new all-time high for the third day this week.

In various sectors, personal and household goods, where luxury goods giants are located, rose more than 1%. Kering rose about 2.6% benefiting from the announcement of the distribution of mid-term dividends in 2023, and its old rival LVMH rose 3.3%. These luxury goods stocks also helped France's stock index lead among European countries. The tourism sector, which led the gains on Wednesday, also rebounded more than 1%. However, the basic resources sector, where mining stocks are located, fell against the trend by 2%, mainly due to the plan to reduce the capital expenditure of all businesses by a total of $1.8 billion by 2026 and the expected decline in production next year. Mining giant Anglo American Resources fell 19%, dragging down the performance of the UK stock index, which had the lowest increase among European countries. Interest rate-sensitive real estate also fell against the trend, down 0.8%.

The Stoxx Europe 600 index rose for the fourth consecutive week, with gains of more than 1% each week for the past two weeks. Stock indexes in various countries continued to rise, with the German and Spanish stock indexes rising for six consecutive weeks, the French stock index rising for four consecutive weeks, and the UK and Italian stock indexes rising for two consecutive weeks. The tourism sector performed the best, rising 4.8%, while the real estate sector, which led the gains last week with an increase of more than 4%, continued to benefit from the decline in European bond yields, with a cumulative increase of nearly 2%; partly due to the decline on Friday, the basic resources sector fell more than 3% throughout the week, performing the worst, and although the oil and gas sector rose more than 1% on Friday driven by a rebound in crude oil, it fell more than 1% throughout the week.

After the employment report, US Treasury yields rise more than 10 basis points, and the two-year yield hits a monthly high

European government bond prices fell across the board, with yields following the rise in US Treasury yields. At the end of the bond market, the yield on the UK 10-year benchmark government bond closed at 4.04%, up 7 basis points during the day; the yield on the 2-year UK bond closed at 4.55%, up 7 basis points during the day; the yield on the 10-year benchmark German government bond closed at 2.27%, up 9 basis points during the day, breaking away from the low of 2.17% set on April 6th; the yield on the 2-year German bond closed at 2.68%, up 10 basis points during the day, far from the low set in May.

European bond yields failed to collectively decline for two consecutive weeks. After rebounding last week, short-term bond yields rose cumulatively, while long-term bond yields fell less than last week. The yield on the 10-year UK bond, which fell by about 15 basis points last week, fell by about 9 basis points this week; the yield on the 10-year German bond, which fell by about 28 basis points last week, also fell by about 9 basis points this week, while the yield on the 2-year German bond, which fell by about 39 basis points last week, rose by about 1 basis point this week.

The yield on the US 10-year benchmark government bond fell below 4.15% before the European stock market opened, hitting a daily low, and then rebounded overall. After the release of the US non-farm employment report, it quickly rose above 4.20% and even approached 4.27% at one point, up 12 basis points during the day, erasing the previous three-day decline and rising to the level of Monday's intraday trading. It rebounded by 17 basis points from the low of around 4.10% reached in early September, and after the announcement of US consumer inflation expectations, it briefly fell back, once falling below 4.21%, and was around 4.23% at the end of the bond market, up about 8 basis points during the day. After two consecutive days of decline, it rose for two consecutive days due to a sharp rise on Friday, with an increase of about 3 basis points this week, rebounding after a decrease of about 27 basis points last week.

The yield on the 2-year US Treasury bond, which is more sensitive to interest rate prospects, fell below 4.59% in early Asian trading when it hit a daily low. It also rose after the release of the US employment report, with US stocks rising above 4.70% in early trading, reaching as high as 4.73% at one point. After the announcement of consumer inflation expectations, it briefly fell below 4.69% in the short term, and then quickly accelerated its rise. The US stock market approached 4.74% at noon, reaching a high since the end of November, and was around 4.72% at the end of the bond market, up about 12 basis points during the day. After a sharp decline of about 41 basis points and the largest weekly decline since the banking crisis in March, it rose by about 18 basis points this week.

Among various maturities of US Treasury bonds, the short-term yield of the two-year bond led the way in rising on Friday. Due to the widening gap between short-term and long-term US Treasury yields, the flattening of the yield curve for two-year and thirty-year Treasury bonds this week is the most significant since November last year, and the degree of yield curve inversion is the most severe since September.

The degree of yield curve inversion for two-year and thirty-year Treasury bonds is the most severe since September.

After the employment report, the US dollar index reached a three-week high, the yen fell from a four-month high, and the euro hit a new low for over three weeks.

After falling on Thursday, the ICE US Dollar Index (DXY), which tracks the exchange rate of the US dollar against six major currencies including the euro, rebounded overall on Friday. After a short-term decline in the Asian session, it fell below 103.50 to hit a daily low, but then rebounded and maintained an upward trend. After the release of the US non-farm payroll report, the index quickly rose above 104.00 and broke through 104.20. After the release of US consumer confidence and inflation expectations, the increase narrowed rapidly and briefly fell below 103.80. During the midday trading session, it once again rose above 104.20, reaching a new high since November 17th, which was created on Wednesday, with an increase of nearly 0.7% during the day.

By the close of the US stock market on Friday, the US dollar index was slightly below 104.00, with an increase of over 0.4% during the day and a cumulative increase of nearly 0.7% for the week. The Bloomberg Dollar Spot Index, which tracks the exchange rate of the US dollar against ten other currencies, rose by nearly 0.2%, approaching the high point of the same period since November 17th created on Wednesday, with a cumulative increase of over 0.6% for the week. Both the US dollar index and the Bloomberg Dollar Spot Index rebounded after a three-day consecutive increase on Thursday. This is the sixth day of increase in the past eight trading days, ending the longest three-week decline since June 16th.

The Bloomberg Dollar Spot Index has seen a cumulative increase for the first time in a month.

Among non-US currencies, the yen, which had risen 3.8% during the day, the largest increase in a year, turned lower during the trading session on Thursday. The USD/JPY fell to 142.50 in the Asian session, down 1.1% during the day, and then continued to rise. After the release of the US employment report, it rose above 145.20, reaching a daily high, with an increase of over 0.7% during the day and a rebound of 1.9% from the daily low. At the close of the US stock market, it hovered around 145.00, with an increase of nearly 0.6% during the day and still a decline of over 1% for the week. After the release of the US employment report, the euro and the pound quickly extended their declines. The EUR/USD fell below 1.0730 in the early trading session of the US stock market, hitting a new low for five consecutive days since November 14th, with a decline of over 0.6% during the day. At the close of the US stock market, it was slightly above 1.0760, with a decline of over 1.1% for the week, marking the largest weekly decline in nearly seven months. The GBP/USD approached 1.2500 in the early trading session of the US stock market, hitting a new low since November 23rd, with a decline of nearly 0.7% during the day.

The offshore renminbi (CNH) against the US dollar hit a daily high of 7.1537 in the Asian session, then fell and maintained a downward trend after the Asian session. After the release of the US employment report, it fell below 7.18, and at the beginning of the US stock market session, it approached 7.19 to 7.1897, hitting a new low since November 20th, which was created on Wednesday. The market fell 265 points today. At 5:59 am on December 9th, Beijing time, the offshore RMB against the US dollar was reported at 7.1872 yuan, a decrease of 240 points from the New York closing on Thursday. After three consecutive declines on Thursday, it fell back this week, with a cumulative decline of 630 points, ending three weeks of consecutive gains.

Bitcoin (BTC), which has fallen for two consecutive days, rebounded on Friday. It fell below $43,100 during the European stock market session, hitting a daily low, and then continued to rise. In the US stock market, it rose above $44,000 in the closing session, hitting a high since April last year for the third consecutive day, with an increase of over $1,000 or about 3% from the daily low, and an increase of over 2% in the past 24 hours and over 14% in the past seven days.

Crude oil rose more than 2% to end a six-day losing streak, but still fell for seven consecutive weeks, the longest in five years.

International crude oil futures rebounded throughout the day on Friday. After the US stock market announced the US consumer confidence index and inflation expectations in the early trading session, crude oil hit a daily high. US WTI crude oil rose above $71.60, up 3.3% during the day, and Brent crude oil approached $76.40, up more than 3.1% during the day.

In the end, crude oil ended the longest consecutive decline since February 22nd, which was the first increase since the OPEC+ meeting. WTI January crude oil futures rose 2.73% to $71.23 per barrel, closing above $70 for the first time in the past three days. Brent February crude oil futures rose 2.42% to $75.84 per barrel, and both US and Brent crude oil prices rebounded from the closing lows since June 27th on Thursday.

This week, US oil fell by about 3.8% and Brent oil fell by nearly 3.9%, both falling for seven consecutive weeks, the longest weekly decline since 2018. This is mainly due to the unexpected increase in US EIA gasoline and refined oil inventories announced on Wednesday, as well as the weak "mini non-farm" ADP employment data. On that day, crude oil experienced the largest daily decline since November 16th, with US oil falling by more than 4% and Brent oil falling by nearly 3.8%. Since the outbreak of the Israel-Palestine conflict, crude oil has only risen in the first two weeks and has continued to fall since then. The voluntary production cut announced by OPEC+ countries after the meeting did not reverse the downward trend.

US gasoline and natural gas futures continued to fluctuate. NYMEX January gasoline futures, which fell for three consecutive days, rose 2.4% to $2.0498 per gallon, rebounding from the two-year low reported for two consecutive days on Thursday, with a cumulative decline of 3.4% this week and a seven-week decline. NYMEX January natural gas futures, which rebounded on Thursday, fell 0.15% to $2.5810 per million British thermal units, close to the nearly three-month low reported on Wednesday, with a cumulative decline of 8.28% this week and a five-week decline.

Copper rebounds to end three weeks of gains, spot gold falls below $2,000 for the first time in two weeks, and futures gold sees its first weekly decline in a month

London base metal futures saw mixed movements on Friday. Copper and nickel both rose for two and three consecutive days, respectively, reaching their highest levels in a week. Lead, which had been falling for more than ten days, and aluminum, which had been falling for four days, both saw a slight rebound, temporarily departing from the six-month and five-month lows they set on Thursday. Zinc, on the other hand, fell for three consecutive days, hitting a new low of over three months, while tin fell from its two-week high set during the previous two days of gains.

Most base metals fell this week, with copper, which had risen for three consecutive weeks, falling nearly 2%. Zinc and lead both fell over 4%, falling for four and three consecutive weeks, respectively. Aluminum fell over 3%, falling for two consecutive weeks after rising more than 5% last week. Nickel, which had fallen for five consecutive weeks before ending the streak last week, fell over 1% this week. Tin, which had fallen for three consecutive weeks, rose over 3%.

In terms of precious metals, New York gold futures saw a rapid increase in losses after the US employment report, with midday trading in US stocks hitting a daily low of $2010.6, falling over 1.7% during the day. Spot gold plunged after the US employment report, with early trading in US stocks falling below $2000, hitting a midday low not seen since November 24th, falling nearly 1.7% during the day, far from the midday historical high of $2150 set on Monday.

In the end, COMEX February gold futures closed down 1.56% at $2014.5 per ounce, hitting a closing low not seen since November 27th, falling for two consecutive days. Gold fell about 3.6% this week, seeing its first weekly decline in a month after rising for three consecutive weeks, marking the second weekly decline in nine weeks since the Israeli-Palestinian conflict ended in the week of November 10th.

Spot gold briefly fell below $2000