Bonds & Stocks
US equity contracts slid as traders pushed back on optimistic scenarios that central bankers will cut interest rates in time to avert recession. Bonds gained. Futures signaled another day of declines for the S&P 500, after the benchmark rose last week to its highest since March 2022 on bets the Federal Reserve would soon pivot to monetary easing. The 10-year benchmark Treasury yield fell five basis points to 4.2%.
Economy
We expect the decline in job openings to accelerate in October’s JOLTS print, albeit gradually. Nevertheless, the number of job openings likely overstates the labor-market strength and associated wage pressures. What we expect in the Dec. 5 release: The number of job openings will decline marginally to 9.34 million in October from 9.55 million in September. Skilled services industries will remain the primary source of openings. We expect to see openings in less-skilled industries, including leisure and hospitality, resume their decline after September’s bump.
World
The ratings agency cut its view of the country’s finances to negative, saying it was concerned about the potential cost of local government bailouts. In another blow to China’s economy, the credit ratings agency
Moody’s said Tuesday that it had issued a negative outlook for the Chinese government’s financial health. Moody’s expressed concern at the potential cost to the national government of bailing out debt-burdened regional and local governments and state-owned businesses.