December 17 Financial Market Scan: Weak Employment Data Sparks Turmoil, Oil Prices Plunge, US Stocks Diverge, Tesla Breaks New Record

Signs of a Weakening Job Market Emerge

The U.S. Bureau of Labor Statistics released a complex set of signals in yesterday’s November employment report. Non-farm payrolls increased by 64,000 jobs month-over-month, exceeding market expectations of 50,000, but the unemployment rate unexpectedly rose to 4.6%, the highest since September 2021, above the forecasted 4.4%. More notably, the previous month’s data was significantly revised downward—October non-farm jobs were actually reduced by 105,000, far exceeding the initial expected decline of 25,000.

This data reflects subtle changes in the labor market—companies are not engaging in large-scale layoffs but are cautiously controlling new hiring. Analysts point out that some firms prefer to have workflows handled by artificial intelligence rather than increasing human labor. Over the past six months, private sector employment has averaged only 44,000 new hires per month, the slowest pace since the economic recovery post-pandemic.

Market Worries About Recession Intensify

Following the employment data release, signals from the Federal Reserve rate futures market became more cautious. The probability of a rate cut again in January remains at 24%, unchanged from the previous trading day, indicating that market expectations for policy adjustments have not significantly shifted. However, the synchronized decline in the bond, oil, and forex markets warrants attention— the U.S. 10-year Treasury yield fell back to 4.14%, down 4 basis points from its high; oil prices also dropped sharply, and the dollar index weakened. This “triple decline” often signals growing market concerns about the U.S. economic outlook.

Stock Market Diverges, Tech Leaders Lead Gains

The U.S. stock market’s three major indices showed mixed performance yesterday. The Dow Jones fell 0.62%, the S&P 500 declined 0.24%, marking the third consecutive day of declines; the Nasdaq rebounded 0.23%, while Chinese concept stocks dropped 0.34%. European markets also retreated, with Germany’s DAX 30 down 0.63%, France’s CAC 40 down 0.23%, and the UK FTSE 100 down 0.68%.

In individual stocks, Tesla performed strongly, rising over 3% to hit a new closing high and climbing to the seventh-largest company by market cap in the U.S. Other tech giants performed relatively steadily, with Meta leading at +1.49%, Nvidia +0.81%, Apple +0.18%, Microsoft +0.33%, while search engine companies fell 0.54%.

Commodity Markets: Crude Oil Plunges, Gold Prices Drop

The energy sector faced clear pressure, with WTI crude oil down 2.66%, trading at $55.17 per barrel. International gold prices also declined slightly, down 0.06% to $4,302 per ounce. This collective pullback in commodities partly reflects market concerns about the global economic outlook.

Cryptocurrency Market Trends

Bitcoin rose 1.42 over the past 24 hours, currently around $87,720. Ethereum slightly declined 0.4% to approximately $2,950. In Hong Kong night session futures, Hang Seng Index futures closed at 25,219 points, 16 points below yesterday’s close.

Macro Policy Outlook

A prominent political leader will deliver a nationwide prime-time speech on Wednesday evening Eastern Time to address declining poll numbers. This speech comes as their first year back in office nears its end, with economic growth facing headwinds and public support under pressure. Over the past year, the government has clashed repeatedly with allies on trade, defense, and immigration issues, and has pushed forward with government restructuring and immigration policy adjustments. The speech is expected to emphasize achievements, clarify priorities for the coming year, and prepare for midterm elections next year.

Federal Reserve Leadership Confirmation Imminent

U.S. Treasury Secretary Bessent stated that this week, one or two rounds of interviews for the next Federal Reserve Chair will be conducted, with the President likely to announce the decision in early January. The current shortlist of candidates has received positive reviews, and Trump revealed in a media interview last weekend that they are his top choices.

Bright Outlook for AI Investment

The Secretary-General of the Organisation for Economic Co-operation and Development recently stated that surging AI investments are driving global economic growth, with expected continued increases and long-term benefits. The organization has raised growth forecasts for several countries, noting that technology spending provides important support amid trade uncertainties. Meanwhile, the OECD predicts that global economic growth will slow to 2.9% next year, below this year’s estimated 3.5%.

Tech Industry Developments

OpenAI has hired a former UK Chancellor to lead its global expansion plans. This project is an overseas extension of the $50 billion interstellar plan, aiming to advance data center construction worldwide. This move follows competitors’ recent appointments of former UK political leaders as advisors in October.

In autonomous driving, progress is rapid. Morgan Stanley estimates Tesla’s Robotaxi fleet could expand significantly to about 1,000 vehicles by 2026. The bank believes that successful validation of driverless testing without safety supervisors and vehicle production in 2026 will be key catalysts.

Upcoming Key Events

Today’s schedule includes important data releases such as the UK November CPI, Germany December Business Climate Index, and Federal Reserve Board member speeches.