Editor's PiCK
[New York Stock Market Briefing] Major Indices Fall as Producer Prices Exceed Expectations and Employment Slows
Summary
- It was reported that the U.S. November Producer Price Index was higher than expected, burdening the stock market and causing major indices to fall.
- According to the U.S. Department of Labor, the increase in weekly initial jobless claims heightened market anxiety.
- The European Central Bank lowered the policy rate by 25 basis points, which is expected to attract investors' attention.
On the New York Stock Exchange, major indices closed lower as higher-than-expected producer price indicators spurred government bond yields.
On the 12th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average fell 234.44 points (0.53%) to 43,914.12, the Standard & Poor's 500 Index dropped 32.94 points (0.54%) to 6,051.25, and the Nasdaq Composite Index decreased 132.05 points (0.66%) to 19,902.84.
It seems that the hotter-than-expected November U.S. Producer Price Index (PPI) prompted stock investors to realize profits. The U.S. Department of Labor announced that the November PPI rose 3% year-on-year (seasonally unadjusted). This exceeded the market expectation of 2.6% and marked the steepest annual increase since the 4.7% rise in February last year.
The fact that the U.S. weekly initial jobless claims exceeded expectations also fueled anxiety. The U.S. Department of Labor reported that the seasonally adjusted initial jobless claims for the week ending on the 7th were 242,000. This is the highest level in two months since the week of October 6-12, which also recorded 242,000 claims.
The European Central Bank (ECB) cut its three main policy rates by 25 basis points each. The deposit rate was adjusted from 3.25% to 3.00%, the refinancing rate from 3.40% to 3.15%, and the marginal lending rate from 3.65% to 3.40%. ECB President Christine Lagarde stated at a press conference that while there was a discussion of a 50 basis point rate cut at this meeting, there was overall agreement on a 25 basis point cut.
Tesla and Alphabet, which had shown strength recently, fell more than 1%, and NVIDIA also dropped more than 1% following news that Google used its own developed semiconductors in its AI service 'Gemini'.
NVIDIA's decline allowed Microsoft to take the second spot in market capitalization.
Donald Trump, the U.S. President-elect, appeared at the opening bell ceremony at the New York Stock Exchange (NYSE) on this day. He emphasized, "We will provide tremendous incentives that cannot be seen in any other country," and "We will reduce taxes significantly."
By sector, all sectors except consumer staples fell.
According to the Chicago Mercantile Exchange (CME) FedWatch Tool, the probability of the federal funds rate being held steady in December was 5.3% at the close, a slight rebound from the previous day.
The Chicago Board Options Exchange (CBOE) Volatility Index (VIX) rose 0.34 points (2.50%) to 13.92 compared to the previous day.
Case, Hankyung.com Reporter case@hankyung.com
Doohyun Hwang
cow5361@bloomingbit.ioKEEP CALM AND HODL🍀
