Welcome to MarketBites! Here's all you need to know about yesterday's market news.
"The price of greatness is responsibility.”
- Winston Churchill
PORTFOLIO MANAGER COMMENTARY
Stocks closed lower to start the week due to social unrest in China concerning their Covid restrictions. More specifically, widespread demonstrations broke out in mainland China over the weekend as people vented their frustrations with Beijing’s zero-Covid policies. Local governments tightened Covid controls as cases surged, even though earlier this month Beijing adjusted some policies that suggested the world’s second-biggest economy was on its way to reopening.
Losses accelerated into the afternoon after comments from Federal Reserve officials indicating interest rates could be higher for longer as inflationary pressure persists. New York Fed President John Williams on Monday said “there is still more work to do” to bring down prices. St. Louis Fed President James Bullard also discussed elevated rates moving forward.
Investors are awaiting the Labor Department’s November jobs data to be released Friday, which will likely factor heavily into the Fed’s December interest-rate decision. The report is expected to show the second straight monthly deceleration in US employment growth. Still, the economy is projected to have added 200,000 jobs last month, which would indicate a still-healthy labor market and keep the Fed on its rate-hiking path.
CHART OF THE DAY
Oil prices dropped on Monday, with Brent crude down 0.5% to $83.19 a barrel, its fourth straight loss and lowest price since January. It fell as low as $80.61 a barrel earlier in the session. Oil prices remain well below their highs seen earlier this year after Russia's invasion of Ukraine. Energy companies fell along with oil prices. Every component in the S&P 500 energy sector closed Monday lower. Diamondback Energy dropped $5.59 a share, or 3.7%, to $143.73. Occidental Petroleum and Exxon Mobil also declined.