Key Highlights

Unemployment Claims Dip

Initial jobless claims fell to 201,000 for the week ending January 4, the lowest since February.
The four-week moving average also dropped to 213,000 from the prior 223,250, signaling ongoing labor market resilience.

Private Payroll Growth Slows

According to the ADP National Employment Report, private payrolls increased by 122,000 in December, down from 146,000 in November.

Economic Context

Earlier data pointed to an unexpected rise in job openings and sticky inflation, bolstering expectations that the Federal Reserve will remain cautious about interest rate cuts in 2025.

Upcoming Catalysts

Markets are awaiting the monthly US nonfarm payrolls report and a speech from Fed Governor Christopher Waller for more clarity on the central bank’s policy stance.

Corporate Sector: Exxon Mobil Warns of Lower Earnings

Exxon Mobil (XOM) shares dropped 1.7% after the company announced that declining oil refining profits and weak operational returns would reduce Q4 earnings by approximately $1.75 billion compared to Q3.

Implications for Investors

Labor Market Resilience

Strong employment data reinforces the likelihood of a delayed Fed rate cut, potentially influencing sectors reliant on borrowing costs, such as housing and tech.

Energy Sector Under Pressure

Exxon Mobil’s warning highlights challenges in the energy sector, which RBC recently downgraded to Market Weight due to declining enthusiasm and earnings trends.

Monitoring Inflation and Wages

Sticky inflation paired with robust labor figures could lead to prolonged Fed caution. Investors can track sector-specific performance using tools like the Sector Historical Overview API for actionable insights.

Outlook
With employment data signaling strength and corporate earnings under pressure in some sectors, would you like insights on specific market strategies or sector analyses ahead of the upcoming nonfarm payroll report?