In recent trading sessions, the precious metal gold has seen an unprecedented surge, closing nearly $28 higher, marking an almost 1% increase, with a closing price of $2841.72. During the day, the price peaked at an astounding $2845.41, setting a new historical recordContinuing this upward momentum, gold prices reached an extraordinary height of $2869.68 in European markets, settling nearby around $2866.

Critical unemployment data has raised eyebrows!

Last night, all three major U.S. stock indexes reported gains by the end of tradingThe Dow Jones Industrial Average rose by 134.13 points, or 0.30%, finishing at 44556.04. The NASDAQ climbed 262.06 points, which is a 1.35% increase, closing at 19654.02. Furthermore, the S&P 500 index gained 43.31 points, marking a 0.72% rise, and closing at 6037.88.

The recent upward trend in the U.S. stock market can be attributed largely to disappointing economic data.

According to the Labor Department's report, released on Tuesday, the Job Openings and Labor Turnover Survey (JOLTS) reported a significant drop in job vacancies to a three-month low.

Data showed that the number of job openings in December fell to 7.6 million, a dramatic reduction compared to September of the previous yearThis figure came well below the expectations of nearly all economists surveyed by the media, hinting at a possible slowdown in the U.S. economy.

Bloomberg's survey of economists had anticipated that job openings in December would stand at 8 million.

Since the all-time high of 12.18 million job openings recorded in March 2022, job vacancies have generally declined due to the Federal Reserve's significant interest rate hikes which dampened demand

Advertisements

Although there was a short-lived rebound in recent months amidst Fed rate cuts, JOLTS figures have shown a consistent downward movement.

In addition to job openings, the recent announcements indicated that U.S. factory orders fell by 0.9% in December, which was a more significant contraction than the forecasted 0.7% shrinkage.

Investors are now turning their attention to the upcoming American ADP employment report scheduled for Wednesday, followed by Friday’s non-farm payroll report to gain further insights into the employment market and potential shifts in Fed policy.

On Wednesday, January 8 at 21:15 Beijing time, the changes in ADP employment numbers for January are set to be releasedThe data is commonly referred to as “little non-farm” data.

According to authoritative media investigations, it is anticipated that the U.S. economy will add 150,000 jobs in JanuaryEarlier in December, ADP data unexpectedly slowed down significantly, reaching its lowest level since August.

On January 8, a report released by the ADP Research Institute, in collaboration with Stanford's Digital Economy Laboratory, showed that U.S. employment figures for December had an increase of 122,000, against expectations of 140,000, and a previous count of 146,000.

Analysts have pointed out that if January's ADP employment data significantly underwhelms expectations once again, it could trigger a fresh decline in the dollar and incentivize further gains in U.S. stocks and physical gold.

Turning our focus to the U.S. markets, institutions have classified the overall trend of U.S. stocks into a downward cycle.

Diana Iovanel, a senior market economist at Capital Economics, stated in a recent report that the driving forces behind the 2025 bull market will resemble those of last year: investor enthusiasm surrounding artificial intelligence will continue to propel the stock prices of major U.S. tech companies, extending the overall market rally.

Manulife Investment believes that the U.S. stock market is currently in a phase of declining earnings per share (EPS), facing significant pressure on corporate profitability due to weak demand and gradually declining yields on U.S. debt, leading to a relative drop in overall cost-performance

Advertisements

Stock buybacks have supported stock prices to some extent, but the overall trend sees a descent.

However, it is mentioned by analysts at Goldman Sachs that the current consensus is to proceed cautiously regarding U.S. tech stocks, waiting for the earnings report of the major tech companies to be fully disclosed, particularly focusing on capital expenditures related to AI.

Moreover, it’s crucial for investors to keep an eye on international geopolitical developments.

Recent developments in the Israel-Palestine conflict have taken the spotlight, as the U.S. president has expressed hopes for the U.S. to take control of the Gaza Strip, aiming to redevelop the region after relocating Palestinians to other countries.

On February 4, following a meeting with Israeli Prime Minister Netanyahu, the U.S. president held a press conference addressing questions from reportersDuring this media briefing, he spoke about the desire for the U.S. to assume control over Gaza and mentioned plans to redevelop the land as the “Riviera of the Middle East.”

Additionally, the U.S. president indicated that the possibility of deploying U.S. military personnel to Gaza is not off the tableWhen responding to a journalist's inquiry, he stated, “Regarding Gaza, we will take all necessary measuresIf required, we will do so,” and he also expressed intentions to visit Israel, the Gaza Strip, and Saudi Arabia.

Hamas officials described the U.S. president's proposition as "unacceptable." Furthermore, Saudi Arabia issued a statement rejecting any attempts to relocate Palestinians, affirming that the nation would not establish relations with Israel if a Palestinian state is not established.

Many residents of Gaza have also condemned this news vehemently

Advertisements

Advertisements

Advertisements