---
title: "The 'mini non-farm' data suppresses expectations of interest rate cuts, causing a plunge in US bonds, a fifth consecutive decline in the Nasdaq, and Apple being downgraded twice in three days, with a cumulative drop of over 5%."
type: "News"
locale: "zh-HK"
url: "https://longbridge.com/zh-HK/news/105438025.md"
description: "S&P fell for the fourth consecutive day, hitting a new three-week low along with Nasdaq, while Dow managed a weak rebound. Apple, which was downgraded by institutions twice this week, fell more than 5% throughout the week. Chip stocks underperformed the market for three days, but Nvidia rebounded. Chinese concept stocks retreated, with NIO initially rising more than 10% but closing down more than 2%, Bilibili down more than 3%, and New Oriental up more than 5%. After the release of the \"mini non-farm\" ADP employment data, US bond yields rose by 10 basis points, and the 10-year yield broke through 4.0% for two consecutive days. The US dollar index rebounded in the short term but ultimately ended the four-day rally, falling from its three-week high. Inflation in Germany and France heated up, and European bond yields rose by more than 10 basis points during the day. The Japanese yen fell more than 1% for several consecutive days, while offshore renminbi fell more than 200 points, once again falling below 7.17 to hit a three-week low. Crude oil failed to rebound for two days and fell during the day, dropping more than 2% at one point. London copper and nickel fell for five consecutive days, with nickel hitting a three-year low. Gold bid farewell to its low position of the past two weeks."
datetime: "2024-01-04T22:50:10.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/105438025.md)
  - [en](https://longbridge.com/en/news/105438025.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/105438025.md)
---

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# The 'mini non-farm' data suppresses expectations of interest rate cuts, causing a plunge in US bonds, a fifth consecutive decline in the Nasdaq, and Apple being downgraded twice in three days, with a cumulative drop of over 5%.

After the release of the minutes of the December meeting of the Federal Reserve on Wednesday, which suggested that the Fed may maintain restrictive high interest rates for some time, market expectations of a significant interest rate cut by the Fed in 2024 have been suppressed. The "mini non-farm" ADP private sector employment report in the United States showed that employment increased by 164,000 in December, significantly exceeding expectations by 39,000. The number of initial jobless claims in the United States last week also decreased more than expected compared to the previous month.

Commentators have expressed doubts about whether the strong growth in ADP employment raises questions about whether the Fed will start cutting interest rates as early as expected and whether the magnitude of the rate cut will be as large as anticipated. After the data was released, US Treasury prices further declined and yields increased during the day. The US December services PMI, which was released subsequently, reached a five-month high and has been in the expansion zone for seven consecutive months, pushing up US bond yields. The US bond yield rose by about 10 basis points from its daily low. The benchmark 10-year US bond yield has broken through 4.0% for the second consecutive day.

After the release of the ADP report and the services PMI, most major US stock indices fell, with technology stocks continuing to drag down the Nasdaq and S&P. Apple's stock rating was downgraded for the second time this week due to concerns about iPhone demand, making it the least popular tech giant on Wall Street. Its stock price has fallen by more than 5% this week, with a market value evaporating by over $150 billion.

Following the release of these data on Thursday, market expectations for the probability of a rate cut by the Federal Reserve in March and the magnitude of the rate cut for the whole year have both declined further.

The market's expectation of a rate cut by the Federal Reserve in March 2024 has dropped to slightly above 60%, while the market's expectation of the cumulative rate cut for the whole year of 2024 has fallen to less than 140 basis points.

In addition, inflation data in the Eurozone has also dampened market expectations of an interest rate cut by the European Central Bank this year. Germany's CPI in December increased by 3.8% year-on-year, significantly faster than the 2.3% growth in November, reaching the highest level in three months. France's CPI in December also accelerated to 4.1% year-on-year, up from 3.9% in November. The rise in inflation supports the European Central Bank's decision to maintain high interest rates for a longer period. Eurozone bond prices accelerated their decline during the day, with yields rising by at least 10 basis points. The highly anticipated US non-farm payroll report and Eurozone inflation data to be released on Friday will continue to gauge whether the central banks in Europe and the United States have room to start cutting interest rates.

After the release of CPI data in Germany and France, the euro rebounded sharply during the session. On the same day, UK consumer credit in November surged by £2.05 billion, exceeding expectations and reaching a nearly seven-year high. This reflects strong consumer loan demand in a high-interest rate environment, while the final reading of the UK services PMI for December was stronger than expected, rising to 53.4, a six-month high. The pound rose during the session, erasing the losses from Wednesday along with the euro.

Under pressure from the rising euro and pound, the US dollar index fell, moving away from the near three-week high set on Wednesday. The decline narrowed after the release of the US ADP employment report. The yen failed to reverse its downward trend, with the yen against the US dollar falling more than 1% for two consecutive days. The offshore renminbi fell below 7.17 for two consecutive days, hitting a three-week low. Cryptocurrencies rebounded overall, with Bitcoin rising more than $2,000 during the session, surpassing $44,000, but still failing to erase the losses from Wednesday and remaining below the 21-month high set on Tuesday.

In the commodity market, international crude oil failed to maintain its rebound from Wednesday. US official data showed a sharp increase in petroleum product inventories last week, intensifying concerns about demand and overshadowing the impact of the Israeli-Palestinian conflict and the closure of Libya's largest oil field. Crude oil rose more than 1% during the session but later turned lower. The US Energy Information Administration's gasoline and refined oil inventories did not accelerate their decline last week, but instead surged by more than 10 million barrels. After the data was released, oil prices fell more than 2% during the session, failing to break away from the two-week low set on Tuesday. Due to the sharp rise on Wednesday, oil prices are still expected to rise this week. Some commentators believe that gasoline and refined oil are often seen as hidden indicators of consumer demand.

The S&P 500 fell for the fourth consecutive day, with Apple falling more than 5% throughout the week, and chip stocks underperforming the market for three consecutive days, while Chinese concept stocks retreated.

The three major US stock indexes had mixed performance in early trading. The Dow Jones Industrial Average, which opened slightly lower, quickly turned higher and maintained its upward momentum. It rose nearly 290 points in the morning session but gradually gave up most of the gains by midday. The S&P 500, which initially fell by nearly 0.2%, turned higher less than half an hour after the opening bell and rose nearly 0.5% in the morning session before turning lower in the afternoon. The Nasdaq Composite Index, which opened lower, turned higher in the late morning session but fell again in the afternoon. At the end of the session, the Nasdaq fell by about 0.6% and the S&P 500 fell by nearly 0.4%.

In the end, only the Dow closed higher, up 10.15 points or 0.03%, at 37,440.34 points. It rebounded after Wednesday's decline but still remained more than 200 points below the record closing high set on Tuesday. The Nasdaq, which fell more than 1% for two consecutive days, closed down 0.56% at 14,510.30 points, marking five consecutive trading days of decline and hitting a new low since December 12th after hitting a low since December 11th. The S&P 500 closed down 0.34% at 4,688.68 points, marking four consecutive trading days of decline and hitting a low since December 12th. The S&P 500 fell nearly 2% on Wednesday, marking the worst performance in the first three days of the new year since 2008.

The small-cap Russell 2000, which is dominated by value stocks, turned lower in the afternoon session, closing down 0.08%. It has fallen for five consecutive days, continuing to hit its lowest closing level since December 13. The tech-heavy Nasdaq 100 index fell 0.53%, also extending its decline for five days and rebounding from its lowest level since December 11. The Nasdaq Technology Market Cap Weighted Index (NDXTMC), which measures the performance of technology stocks in the Nasdaq 100 index, fell 0.62% for the fourth consecutive day, hitting its lowest level in two days since December 11.

Most major US stock indices closed lower on Thursday, with the afternoon session hitting new daily lows.

Among the major sectors of the S&P 500, only three saw gains on Thursday. The healthcare sector, where Merck is located, rose nearly 0.5%, while the financial sector rose over 0.2% and the industrial sector rose 0.1%. Among the eight sectors that declined, the energy sector led the way with a decline of over 1.6%, while the non-essential consumer goods sector, which includes Amazon, fell nearly 1%. The other sectors fell by less than 0.7%.

Among the Dow Jones Industrial Average components, Merck had the best performance, rising nearly 2%. After cutting its quarterly dividend in half to $0.25 per share to strengthen its long-term balance sheet and cash position, pharmacy giant Walgreens (WBA) fell nearly 12% in early trading and closed down 5.1%, leading the decline among the components. Apple, Nike, and the only energy stock, Chevron, all fell more than 1%.

A few leading tech stocks rebounded. Tesla, which fell 4% on Wednesday, rose over 1% in early trading but turned lower in the afternoon session, closing down over 0.2%. It has fallen for five consecutive days, hitting its lowest closing level in two days since December 12. Among the six major FAANMG tech stocks, Apple fell over 1.8% in early trading after being downgraded by Piper Sandler, the second institution to do so this week, from overweight to neutral due to concerns about iPhone demand in China. It closed down nearly 1.3%, falling for four consecutive days to its lowest level since November 7. Amazon fell 2.6%, hitting its lowest closing level since December 6 for four consecutive days. Alphabet, the parent company of Google, which halted its four-day decline on Wednesday, fell 1.8% and fell to its lowest level since December 18. Microsoft, which plans to add an AI key to its PC keyboards, turned lower in the afternoon session, closing down over 0.7% and falling to its lowest level since December 14 after a slight increase on Wednesday. Netflix rose over 0.9% after falling for three consecutive days to its lowest level since December 12, rebounding for several days. Meta, the parent company of Facebook, which fell for three consecutive days to its lowest level since December 15, rose nearly 0.8%. The overall chip stocks have fallen for three consecutive days, underperforming the broader market. The Philadelphia Semiconductor Index and the semiconductor industry ETF SOXX initially fell by nearly 1.7% and 1.8% respectively, both closing down 0.8% and hitting a new low since December 8th. Among individual stocks, by the end of the trading day, AMD and NXP Semiconductors fell by nearly 4%, Wolfspeed fell by over 2%, Qualcomm, which launched an upgraded chip for mixed reality headsets, fell by 1%, while NVIDIA rose by over 1% in early trading and closed up 0.9%. After announcing the establishment of Articul8 AI, a company aimed at providing generative AI services, in partnership with an investment firm, Intel initially fell by over 3% and later closed down by nearly 0.4%, while AMD closed up 0.5%.

Including Apple, Microsoft, Alphabet, Meta, Amazon, NVIDIA, and Tesla, the seven major tech stocks further declined on Thursday, erasing the gains since early December.

AI concept stocks rebounded overall and outperformed the broader market. By the end of the trading day, BigBear.ai (BBAI) rose by nearly 5.9%, SoundHound.ai (SOUN) rose by 4%, C3.ai (AI) and Palantir (PLTR) rose by approximately 1%, while Adobe (ADBE) fell by 0.8%.

Most popular Chinese concept stocks retreated. The Nasdaq Golden Dragon China Index (HXC) initially fell by over 0.7%, turned positive in early trading, then fell again during the afternoon session, closing down 0.4% after rebounding on Wednesday. The Chinese concept ETFs KWEB and CQQQ closed down by approximately 1.2% and 1.7% respectively. The three new energy vehicle companies had mixed performances, with XPeng Motors and NIO both closing down by about 2.7%, and Li Auto, which had risen by over 1% in early trading, turned negative and closed down by approximately 1.8%. Among other individual stocks, after announcing a visit by a Chinese automotive supplier delegation to discuss supply chain strategic cooperation opportunities, Faraday Future initially saw its stock surge by 11%, but fell during the afternoon session, closing down by 2%. By the end of the trading day, Dada Group fell by over 4%, Bilibili fell by over 3%, Alibaba, Tencent Music, and DouYu fell by over 2%, JD.com fell by over 1%, Pinduoduo fell by 0.8%, NetEase fell by nearly 0.4%, while New Oriental rose by over 5%, Gaotu Education rose by over 3%, TAL Education rose by over 1%, Baidu rose by over 0.5%, and Xueda Education made a slight turnaround.

Banking stocks rebounded and outperformed the broader market. The overall banking industry index, the KBW Bank Index (BKX), which fell to a low since December 20th on Wednesday, closed up 0.6%. The KBW Nasdaq Regional Banking Index (KRX) closed up 0.4%, and the regional banking stock ETF, SPDR S&P Regional Banking ETF (KRE), closed up 0.5%, all recovering from the lows set on December 12th. In the volatile stock market, Mobileye Global Inc (MBLY), an autonomous driving technology company, initially fell 29% and closed down 24.6% after issuing a warning that its first-quarter revenue would decrease by 50% YoY due to excessive customer inventory. APA, an oil company, fell nearly 7.4% after completing a $4.5 billion all-stock acquisition of shale oil producer Callon Petroleum. Despite a YoY decline in net sales and net profit in the second quarter, Cal-Maine Foods, the largest egg producer in the United States, still rose, with a midday increase of 4.7% and a closing increase of 2.6%.

In the European stock market, after two consecutive days of decline, the pan-European stock index rebounded. After experiencing the largest drop since November 10th on Wednesday, the STOXX Europe 600 Index rebounded from the closing low since December 13th. The main European stock indexes rose, with the French and British stock indexes, which had fallen for two consecutive days, and the German-Italian stock index, which had risen for two consecutive days, all rebounding.

Among the sectors of the STOXX 600, banks led the gains with a 1.8% increase, pushing up the Italian and Spanish stock indexes by more than 1%. Utilities rose 1.6%, healthcare rose nearly 1.4%, and reached a new closing high due to a 3.6% increase in Novo Nordisk's stock price. However, retail fell nearly 0.8%, dragged down by a 23% plunge in JD Sports Fashion, a British sportswear retailer that lowered its full-year profit expectations. Its German counterparts Adidas and Puma also fell by 3% and 5.9% respectively. The technology sector fell 0.4% for the fifth consecutive day.

In terms of individual stocks, ASML, the giant lithography machine manufacturer, continued to fall in the European stock market after the Dutch government revoked part of its export license for sales to China. By Thursday, its stock had fallen for five consecutive days, closing down more than 0.3%. Maersk, the shipping giant, rose 4%, and its German counterpart Hapag-Lloyd surged 14.8%, both rising for four consecutive days.

![Image](https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/30a957cf-baf3-4510-8531-a9f7a3cfdc06.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg)

## European bond yields rise more than 10 basis points, US bond yields rise 10 basis points, and the 10-year yield breaks below 4.0% in consecutive trading days.

European government bond prices fell across the board, with yields rising more than 10 basis points, erasing the decline seen on Wednesday. At the end of the bond market, the yield on the UK 10-year benchmark government bond closed at 3.72%, up about 9 basis points during the day, and briefly rose above 3.74% during the day, reaching a high since December 18th. The yield on the 2-year UK bond closed at 4.16%, up about 10 basis points during the day, and briefly rose above 4.20% during the day, reaching a high since December 20th. The yield on the 10-year benchmark German government bond closed at 2.12%, up about 10 basis points during the day, and briefly rose above 2.14% after the release of the US services PMI, reaching a three-week high. The yield on the 2-year German bond closed at 2.51%, up about 11 basis points during the day, and briefly approached 2.54% during the day, reaching a high since mid-December. The yield on the 10-year US Treasury benchmark bond fell below 3.90% in pre-market trading in Europe, hitting a daily low. It then rebounded and rose above 4.0% after the US stock market opened, approaching the intraday high on December 14th when it broke through this level. It rebounded by nearly 11 basis points from the daily low, reaching around 4.00% at the end of the bond market. It rose by about 8 basis points during the day, rebounding after a decline in Wednesday's trading session, marking the fourth consecutive day of gains in the past five trading days.

Following Wednesday's performance, the 10-year US bond yield once again surpassed 4.0% during the trading session on Thursday.

The 2-year US Treasury yield, which is more sensitive to interest rate prospects, fell below 4.30% in pre-market trading in Europe, hitting a daily low. It briefly rose to 4.40% during the US stock market session, reaching a high since December 20th. It rebounded by nearly 10 basis points from the daily low, reaching around 4.38% at the end of the bond market. It rose by 6 basis points during the day, marking the third consecutive day of gains.

The ICE US Dollar Index (DXY), which tracks the exchange rates of the US dollar against six major currencies including the euro, briefly rose during the Asian trading session. It fell below 102.20 during the early European trading session, hitting a daily low. It fell more than 0.3% during the day, moving away from the high since December 14th when it rose above 102.70. It then rebounded and accelerated its rise after the release of the US ADP employment report. The US stock market initially rose during the morning session but quickly turned downward. It briefly fell below 102.30 during the morning session and narrowed its decline during the afternoon session.

By the close of the US stock market on Thursday, the US Dollar Index hovered around 102.40, falling less than 0.1% during the day, ending its four-day consecutive rise. The Bloomberg Dollar Spot Index, which tracks the US dollar against ten other currencies, rose slightly less than 0.1%, reaching a high since December 20th over the same period.

Among non-US currencies, the euro rose above 1.0970 against the US dollar during the European trading session, while the British pound rose to test 1.2730. Both currencies erased all the losses since January 3rd and rebounded to the intraday levels since January 2nd. They rose by nearly 0.5% and more than 0.5% respectively during the day. The euro moved away from the low since December 17th when it fell below 1.0900. The Japanese yen fell for the third consecutive day, with two consecutive days of decline exceeding 1%. The US dollar rose above 144.80 against the Japanese yen during the US stock market morning session, rising by nearly 1.1% during the day, reaching a high since December 19th. Offshore Renminbi (CNH) against the US dollar rose to 7.1526 before the European stock market, hitting a daily high, and then continued to fall. The US stock market turned down before the market, and the US stock market fell to 7.1783 in early trading, refreshing the low since December 13th when it fell below 7.17, a decrease of 257 points from the daily high. At 5:59 am on January 5th Beijing time, the offshore Renminbi against the US dollar was reported at 7.1752 yuan, up 89 points from the New York closing on Wednesday, falling for four consecutive trading days.

Bitcoin (BTC), which fell more than $5,000 and more than 10% on Wednesday, rebounded on Thursday. After the US stock market rose above $44,000 in early trading, it rose to above $44,300, refreshing the daily high, rising more than $2,000 and more than 5% from the intraday low in the Asian market. At the close of the US stock market, it hovered around $44,400, rising more than 3% in the past 24 hours, but still far from the 21-month high of nearly $46,000 reached on Tuesday.

Crude oil failed to rebound for two consecutive days and fell during the trading session, with US WTI crude oil rising to $74 per barrel when the European stock market hit a daily high, up nearly 1.8% intraday, and Brent crude oil rising above $79.4 per barrel, up nearly 1.5% intraday. After the US stock market turned down and hit a daily low, it fell below $71.10 per barrel, down nearly 2.3% intraday, and fell to $76.5 per barrel, down more than 2.2% intraday, gradually erasing most of the decline.

WTI February crude oil futures, which rose about 3.3% on Wednesday, fell 0.70% to $72.19 per barrel. Brent March crude oil futures, which rose about 3.1% on Wednesday, fell 0.84% to $77.59 per barrel. Both US and Brent crude oil failed to continue to break away from the closing low since December 13th, and are expected to accumulate gains this week after falling back last week.

US gasoline and natural gas futures showed different trends. NYMEX February gasoline futures, which rebounded 3% on Wednesday, fell 2.2% to $2.1101 per gallon, approaching the low since December 13th last Thursday. NYMEX February natural gas futures rose more than 5.73% to $2.8210 per million British thermal units, hitting a high since November 27th, rising for three consecutive days. London copper and nickel both fell for the fifth consecutive day, with nickel falling more than 2% and closing below $16,100, hitting a new low since April 2021. London copper also fell for five consecutive trading days, reaching a two-week low. Lead fell for the fourth consecutive day, hitting a three-week low for the second consecutive day. Zinc fell by about 2%, and aluminum, which also fell for three consecutive days, hit a two-week low. Tin, which rebounded on Wednesday, fell to a two-week low.

Supported by the decline in the US dollar, New York gold futures, which plummeted on Wednesday, maintained an upward trend throughout Thursday, reaching a daily high of $2,058.1 during European trading hours, with an intraday increase of more than 0.7%. In the end, COMEX February gold futures closed up 0.35% at $2,050 per ounce, bidding farewell to the closing low since December 18 set on Wednesday.

Despite the rebound on Wednesday, gold futures are still expected to decline this week, as they fell by 1.48% on Wednesday, marking the largest drop since December 8. This is the first weekly decline in the past month.

Spot gold rose to above $2,051 during European trading hours, with an intraday increase of nearly 0.5%, breaking away from the low of $2,031 set on December 20, when it fell more than 1% on Wednesday.

 Spot gold returns above $2,040.

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