A job and resource fair hosted by the Mountain Area Workforce Development Board in partnership with NCWorks in Hendersonville, North Carolina, U.S., on Tuesday, Nov. 19, 2024.
Allison Joyce | Bloomberg | Getty Images
This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.
What you need to know today
Explosion of jobs in December
U.S. nonfarm payrolls surged 256,000 in December, up from 212,000 in November and above the 155,000 forecast from the Dow Jones consensus, the U. S. Bureau of Labor Statistics reported Friday. The unemployment rate ticked down to 4.1% from 4.2% in November. Economists expected the rate to stay the same in December.
U.S. markets in the red for 2025
Markets in the U.S. slumped on Friday after the expectation-busting jobs report for December was released. Major U.S. indexes are now in the red for 2025. The pan-European Stoxx 600 index lost 0.84%, with all major bourses closing in negative territory. Euro zone government bond yields climbed to fresh multi-month highs.
Why Meta had to ‘bend the knee to Trump’
Meta’s announcement on Tuesday that it would eliminate its third-party fact-checking was seen as an attempt to appease U.S. President-elect Donald Trump. Here’s why Meta had to “bend the knee to Trump,” in the words of a former Facebook vice president. Separately, CEO Mark Zuckerberg was interviewed on Friday on the “Joe Rogan Experience,” in which he slammed Apple for lackluster innovation efforts.
Apple losing market share in China
Apple shares slid 2.4% after analyst Ming-Chi Kuo wrote on Friday that, in December, the company’s iPhone shipments in China dropped around 10%-12% from a year earlier, compared with flat smartphone shipments overall. Furthermore, there’s “no evidence” that Apple Intelligence is driving hardware upgrades or services revenue, according to Kuo.
TikTok might be banned in the U.S. 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 justices seemed generally unconvinced by TikTok’s main argument that banning TikTok violates the free speech rights of its millions of users in the U.S., which means the app could disappear from app stores as soon as this week.
[PRO] Inflation report and banks’ earnings for the week
The U.S. consumer price index for December comes out Wednesday. It’ll indicate if inflationary pressures continue to weigh on the economy and markets, especially after nonfarm payrolls for December came in surprisingly high. Big banks such as JPMorgan Chase, Goldman Sachs and Morgan Stanley report earnings in the second half of the week.
The bottom line
December’s job additions were 100,000 more than expected by Dow Jones consensus estimates.
Investors worried that the Fed may stay hawkish in response to the hot labor market. The market-implied probability of just a single cut this year increased to 68.5% after the jobs report, according to the CME Group’s FedWatch gauge.
Bond yields, which have already been elevated in recent weeks, jumped further on the release of the jobs report. The 10-year Treasury yield hit its highest level since November 2023.
The market sell-off after the release of the jobs report was prompt and not unexpected. The S&P 500 slid 1.54%, the Dow Jones Industrial Average dropped 1.63% and the Nasdaq Composite lost 1.63%. All major indexes are now in negative territory for 2025.
Good news is bad news for investors, as the hackneyed phrase goes.
But we should remember circumstances are different now than they were during the peak of inflation.
The U.S. Federal Reserve might not be as worried about a robust labor market this time. On the contrary, strong jobs growth probably reassures it, considering that concern over the employment rate was one of the reasons why the Fed decided on a jumbo 50-basis-point rate cut in September.
“You’re never going to hear me complain that we got 250,000 jobs,” Chicago Fed President Austan Goolsbee said on CNBC’s “Squawk on the Street.” Goolsbee also noted that inflation over the past six months has been around 1.9%, or just below the Fed’s target.
In times when inflation is lower, strong employment numbers are a sign of a resilient economy.
And economic growth ultimately “means the potential for better earnings, less risk of a recession, and that’s really going to dictate longer term returns versus a sell-off in today’s market,” Adam Turnquist, chief technical strategist at LPL Financial, said.
In other words, good news can just 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.
