In Markets "In a Nutshell"

Markets “In a Nutshell” for January 13, 2025

Investment Week at a Glance

Stocks finished lower for the week. The Dow Jones Industrial Average fell 1.9%, the S&P 500 was down 1.9%, and the NASDAQ fell 2.3%. Foreign stocks (MSCI EAFE) were also down, falling 0.4%. Bond prices were down for the week, with the 10-year U.S. Treasury ending the week at 4.76%.  (Data source: Wall Street Journal)

December Jobs Report

The December jobs report came in above expectations adding 256,000 jobs compared to expectations of 165,000. The unemployment rate also ticked lower from 4.2% to 4.1%. Wage growth came in at 3.9% year-over-year, slightly below the expectations of 4%. This could possibly signal a potential easing in wage inflation as well. This data continues to support the belief that the economy is still strong and growing. Another positive is that wage growth continues to outpace inflation meaning the consumer has an increasing spending power which is good for economic growth.

Market Changes Expectations on Rate Cuts

The market had been expecting 4 rate cuts in 2025 and then the Fed came out and said they were expecting 2 rate cuts. Now the market currently only has one rate cut priced in for 2025 and the odds of no rate cut growing. Yields have moved higher as a result of this with the 10-Year Treasury Yield moving near the 4.8% mark, the highest since October of 2023. The higher yields have put pressure on equities and bonds to start the year but does give investors who are looking to buy bonds an opportunity for higher yields as they can take advantage of the recent increase.

Moderna Stock Falls 20%

Moderna lowered its 2025 forecast as demand for its Covid-19 vaccine has declined rapidly. The company now expects revenue to come in between $1.5 billion and $2.5 billion in 2025. The stock is now down over 90% from its all-time high in September of 2021 when the company was valued at over $180 billion. Today Moderna is now worth less than $13 billion as its revenue from the Covid-19 vaccine has fallen from nearly $20 billion in 2022 to possibly 1/10 of that in 2025. (CNBC)

Quiz:

What is the long-term unemployment rate in the United States? (Scroll Down for Answer)

  1.    5.7%
  2.    6.1%
  3.    6.4%
  4.    7.1%

 

 

 

Answer below.

 

 

Have a Great Week!

 

 

 

 

 

 

 

Answer:

1.   5.7%. The long-term unemployment rate in the United States is much higher than what we have recently seen. This is one reason the Fed is not looking to cut rates because they labor market continues to be strong and has not shown many signs of weakness.

 

 

 

 

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