January 30 - Stocks are mixed at mid-day on the back of mixed economic news and earnings results, with the Dow Jones slightly higher, the S&P 500 roughly unchanged, and the Nasdaq in the red at the time of writing. The VIX has cooled throughout the day, falling back near the 13.4 level. The dollar remains slightly weaker, hovering below 103.3 after pushing above 103.4 earlier in the session. Treasuries have firmed from their morning lows in the wake of a stronger than expected U.S. jobs market, with 10-year yields pushing near 4.08% and 2-year yields now in the green above 4.37%. Crude oil is holding onto morning gains thus far, with the nearby WTI contract hovering near $78/barrel at the time of writing. A surprising turnaround Tuesday is being seen in the grain markets, with the entire complex now in the green despite a lack of fresh positive fundamental news, following an ugly finish to last week and start to this week.
This morning's JOLTs report showed continued strength in the U.S. labor market, with December U.S. job openings rising to 9.026M, sharply above forecasts of 8.75M and above November's upwardly-revised 8.925M. After some signs of cooling this fall, December marks the highest job openings since September. The continued strength in the U.S. labor market has been a major driving force behind the inflationary pressures seen in the U.S. due in large part to wage inflation. Today's much stronger than expected job openings reading provides the hawks additional ammunition to point to as a sign of the need to hold rates higher for longer.
Conversely, U.S. job quits fell to their lowest since January 2021 at 3.392M, down from the 3.471M in November and below market expectations of a moderate decline to 3.45M. This helps the dove's case, with record quits in recent years largely driven by leaving current positions for higher paying jobs, adding to wage inflation. The quits rate is often viewed as a measure of confidence in the labor market, meaning the slowdown in employees voluntarily leaving jobs is a potential reflection of a changing perception of opportunities at the employee level. The mixed results of today's JOLTs report highlights the challenge in front of the Fed as they gather today. Some signs of weakness have emerged in certain sectors of the U.S. economy, but overall continued economic strength keeps fears of a resurgence of inflationary pressures present, forcing the Fed to walk a tight rope in the year ahead.
U.S. consumer confidence surged to start the new year, with this morning's Conference Board Consumer Confidence Index rising to 114.8 in January, well above December's 108 and marking the highest level seen since December 2021. This was the third consecutive monthly improvement in consumer confidence and coincides well with the firm consumer spending data seen to finish out 2023. Today's strength could be an indicator of some of that firmness continuing to start 2024. As with the above labor data, this is a bit of a double-edged sword for the Fed. The continued resilience of the U.S. economy is improving consumer confidence, but that could also lead to persistence in inflationary pressures if that leads to continued strength in spending. As the data continues to roll in, parsing through commentary from Fed members following this week's meeting gains more and more importance as the market attempts to gauge their reaction and project their course accordingly.
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