US job growth in December came in higher than expected, with nonfarm payrolls increasing by 256k jobs, according to the US Labor Department’s figures (pdf). That far exceeds economist expectations of 160k new jobs, Reuters notes, and is the highest pace of growth since March, according to Bloomberg.

Despite the bumper job data indicating healthy economic growth, the news upends market expectations of further rate cuts from the US Federal Reserve by May, with a fifty-fifty chance of follow-on cuts before the year is out, the newswire said, citing CME's FedWatch tool. Traders now expect a single rate cut for the year that won’t unfold before June. Resurgent inflation has also added to trader concerns of delayed rate cuts, as oil prices rallied and longer-term expectations for consumer inflation hit their highest since 2008, Bloomberg explained.

Good news, bad news: “This is one of those classic good-news-is-bad-news types of data point,” Ocean Park Asset Management CIO James St. Aubin tells Reuters. “When I think about the economic data that's good for growth, but it certainly weighs on the yield picture and kind of puts a bit of a bind when it comes to lowering rates.” Premier Miton Investors CIO Niel Birrell echoed similar thoughts to Bloomberg, saying that while the data is positive for the US’ economy, it suggests that interest rate cuts will be more delayed than expected.

Wall Street had a mixed take on the report’s results: The S&P 500, Dow Jones, and Nasdaq shed between 1.54% to 1.63%, while US 10-year treasury notes hit 4.79% — their highest since November 2023 — before paring down to settle at 4.761%, the newswire explained. S&P 500’s slide saw it roll back all of its YTD gains.

TASI

12,098

+0.1% (YTD: +0.5%)

MSCI Tadawul 30

1,510

+0.2% (YTD: +0.1%)

NomuC

31,027

+0.8% (YTD: -1.4%)

USD : SAR (SAMA)

USD 3.75 Sell

USD 3.75 Buy

Interest rates

5.0% repo

4.5% reverse repo

EGX30

29,445

-1.2% (YTD: -1.0%)

ADX

9,495

+0.4% (YTD: +0.8%)

DFM

5,228

0.0% (YTD: +1.4%)

S&P 500

5,827

-1.5% (YTD: -0.9%)

FTSE 100

8,248

-0.9% (YTD: +0.9%)

Euro Stoxx 50

4,977

-0.8% (YTD: +1.7%)

Brent crude

USD 79.76

+3.7%

Natural gas (Nymex)

USD 3.99

+7.8%

Gold

USD 2715.00

+0.9%

BTC

USD 94,922.60

+0.3% (YTD: +1.0%)

THE CLOSING BELL: TADAWUL-

The TASI rose 0.1% yesterday on turnover of SAR 7.5 bn. The index is up 0.5% YTD.

In the green: Nice One (+7.7%), Cenomi Retail (+6.5%) and Abo Moati (+4.4%).

In the red: Salama (-5.9%), Almoosa (-5.1%) and Shaker (-3.9%).

THE CLOSING BELL: NOMU-

The NomuC rose 0.8% yesterday on turnover of SAR 74.4 mn. The index is down 1.4% YTD.

In the green: Al Jouf Water (+30.0%), Al Naqool (+12.9%) and Al Razi (+11.9%).

In the red: View (-5.2%), Al Wasail Industrial (-3.9%) and Gas (-3.8%)

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