A Turnaround for U.S. Quits Rate; Eyes on Fed's Balance Sheet By James Christie
Good day. Today, U.S. labor-market data on December and 2023 quits, hiring and job openings will be released. The rate at which employees are quitting fell to prepandemic levels in recent months while the pace of hiring by companies normalized. Fewer resignations could mean workers are less confident about finding new jobs. The data comes as Federal Reserve officials kick off their two-day meeting, which is expected to wrap up with them holding interest rates steady. That is leaving Fed watchers intent on seeing if Chair Jerome Powell and the rate-setting Federal Open Market Committee provide clues about plans for coming months. Additionally, investors will be hoping to glean any hints Powell gives about the Fed's balance sheet plans, Justin Lahart and Telis Demos of The Wall Street Journal write. They note that slowing the pace the balance sheet is shrinking makes it less likely the Fed has to suddenly stop quantitative tightening or reverse course abruptly as in 2019.
Now on to today's news and analysis.
Top News Fewer Workers Are Quitting. Here's What That Means for the Economy.
Workers called it quits less frequently in 2023 , a sign confidence in the labor market is falling as the U.S. economy is expected to slow and Americans are taking longer to find new jobs.
That is a turnaround from the years just after the pandemic took hold, when resignations surged and companies faced labor shortages. In 2021 and 2022, employers put up billboards seeking workers, eliminated background checks, offered big raises and handed out signing bonuses to restaurant and factory workers.
What the Fed's Rate Decision Will Mean for Investors
On Wednesday, the Federal Reserve is set to give a decision on interest rates. When will it finally begin lowering rates? Former St. Louis Fed President James Bullard joins WSJ's Take on the Week to share his thoughts on the decision and what he thinks the Fed needs to prioritize next.
Listen Now U.S. Economy What Investors Need to Know About the Treasury's Borrowing Plans
The Treasury Department is set to release its latest borrowing plan on Wednesday, a once-routine event that lately has fueled market swings thanks to concerns about the federal budget deficit.
Treasury Cuts Its First-Quarter Borrowing Estimate ( MarketWatch ) The Real-Estate Downturn Comes for America's Premier Office Towers
Rents at the highest-end buildings have been falling , while the rate of leasing has been slowing. Tenants have become more sensitive to costs in a world of higher interest rates and lingering concerns about a possible slowdown.
The $400,000 Job That Doesn't Require a College Degree
Retail giant Walmart is giving bigger bonuses and adding stock awards to annual pay packages for its superstore managers , pushing the total compensation for the best ones to more than $400,000 a year.
Key Developments Around the World Europe's Stagnating Economy Falls Further Behind the U.S.
The eurozone economy stagnated in the final three months of 2023, expanding a divide between a booming U.S. economy and a European continent that is increasingly left behind.
Germany's Economy Shrank at End of 2023 'What the Hell?' Europe Chafes at America's Protectionist Tilt Key China Bond Yield Hits Lowest in Over Two Decades
The yield on China's benchmark government bond dropped to its lowest level in over two decades on growing expectations that Beijing will deliver more monetary policy easing to help bolster its economy.
Why Oil Prices Rose After Shrugging Off a Crisis
Futures on Brent crude gained more than 6% last week after winter storms slammed U.S. oil production and new data showed the country's economy has remained resilient, suggesting robust demand for fuel ahead .
Saudi Arabia Tells Aramco to Halt Oil Production Capacity Increase The Hottest Job Market in Sports
The soccer industry known for its low job security, erratic bosses, and suffocating public scrutiny has suddenly found itself with a glut of plum gigs ready to hit the job market, which includes Liverpool and Barcelona.
Financial Regulation Roundup Top Goldman Sachs Executive to Depart
Jim Esposito, co-head of Goldman Sachs's sprawling global banking and markets division and one of the senior-most executives at the firm that helped set its strategy, plans to leave after nearly 30 years.
Private-Fund Lobbyists Get Set for High-Stakes SEC Court Fight
Regulators and the private-equity industry are gearing up for a trial that could determine the government's ability to set rules for buyout funds , with some business interests hoping the case could loosen regulators' hold on Wall Street.
HSBC Slapped With $73 Million U.K. Fine Over Deposit Insurance
U.K regulators dinged global banking giant HSBC Holdings for "serious failures" in identifying which customer holdings were covered by deposit insurance, levying a fine of $73 million on the bank.
Forward Guidance Tuesday (all times ET)
Time N/A: Federal Open Market Committee meeting
9 a.m.: S&P CoreLogic Case-Shiller Home Price Index for November
10 a.m.: The Conference Board Consumer Confidence Index for January; U.S. Job Openings and Labor Turnover Survey (JOLTS) for December
10:30 a.m.: Dallas Fed Texas Retail Survey
Wednesday
Time N/A: Federal Open Market Committee meeting
8:15 a.m.: ADP National Employment Report for U.S. for January
8:30 a.m.: U.S. employment cost index for fourth quarter; Canada gross domestic product for November
9:45 a.m.: Chicago Business Barometer for January
2 p.m.: Federal Reserve interest rate decision
2:30 p.m.: Federal Reserve's Powell holds press conference on interest rate decision
Research BOE Gilt Sale Program Could Continue Well Into 2025
The Bank of England's sale of gilts, as part of reducing its asset purchase facility holdings, could continue throughout 2024 and well into next year, Danske Bank Research analysts write in a note. The gilt sale program, also known as quantitative tightening, has the effect of tightening monetary policy and liquidity conditions. "We look for the BOE to continue QT even as it starts to cut interest rates later in 2024-likely from June," they write. The BOE is likely to continue its quantitative tightening program for longer than the Federal Reserve and the European Central Bank, the analysts add.
-Miriam Mukuru
Commentary A Little Dual Easing Soon Could Help the Fed Avoid Major Easing Later
The Fed would like to see whether the economy can handle a higher level of rates than before the pandemic and how much its balance sheet can shrink without risking bank distress, Justin Lahart and Telis Demos write.
The Real Evergrande Reckoning Is for China's Foreign Creditors
The poster child for China's real-estate crisis, China Evergrande Group, is finally meeting its maker. Its passing won't be pretty: especially for the foreign creditors that helped finance its rise, Jacky Wong writes.
Basis Points Factory activity in Texas sank in January, hit by weakening new orders and shipments, albeit with the future outlook for the sector looking brighter. The Federal Reserve Bank of Dallas said its Texas Manufacturing Outlook Survey's index for general business activity fell from a revised minus 10.4 in December to minus 27.4. Expectations regarding future manufacturing activity six months ahead improved in January, climbing 9.7 points to 21.7. (Dow Jones Newswires) The average U.S. homebuyer's budget is starting to stretch a little further, Redfin said, noting a homebuyer on a $3,000 monthly budget has gained nearly $40,000 in purchasing power since mortgage rates peaked this past fall. (DJN) U.S. corporate borrowers are likely to see credit stresses continue this year, "with persistent price pressures likely to keep interest rates elevated and investors becoming more cautious as GDP growth inevitably slows," S&P Global Ratings said in a report. (DJN) Global mergers-and-acquisitions activity is on track to rebound in 2024 as market participants get more certainty on interest rates, but dealmaking in corners of Australia's energy and resources sector faces uncertainty as the prices of some commodities slump. Confidence around the eurozone economy remained gloomy in January, with consumer sentiment notably slipping, according to a survey of consumers and managers. The eurozone sentiment indicator, an aggregate measure of business and consumer confidence, ticked down very slightly to 96.2 from 96.3 in December, European Commission data showed Tuesday. (DJN) France's economy didn't grow in the final months of last year, dragged by weak domestic demand. Gross domestic product remained flat between October and December from the previous three-month period, figures from national statistics agency Insee showed Tuesday. (DJN) Italy's economy expanded slightly at the end of last year as industry, services and exports all rose. Gross domestic product increased by 0.2% over the October-December period, picking up pace from a 0.1% rise the previous quarter, new and revised data from statistics agency Istat showed Tuesday. (DJN) Spain's economy grew more than expected in the final quarter of last year as domestic and external demand proved robust. Gross domestic product increased by 0.6% between October and December, rising from 0.4% the previous quarter, figures from national statistics body INE showed Tuesday. (DJN) Belgium's economy grew at an unchanged pace in the last months of 2023, capping a year of steady but unexplosive expansion with further sluggishness expected. It grew 0.4% in the fourth quarter, the same rate as the previous quarter, according to the National Bank of Belgium. Industry continued to decline in the year's final quarter, but the services sector boosted growth with an increase of 0.7%. (DJN) Australian consumer confidence fell last week, but the four-week moving average rose to its highest level in nearly a year. Consumer confidence fell 1.9 points over the week, according to a survey by ANZ Bank and pollster Roy Morgan. (DJN)
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01-30-24 0801ET
