December 17 Financial News: Unemployment Crisis Emerges, Energy Prices Plunge, Tech Stocks Lead to New Highs

Market Overview

U.S. stocks showed mixed performance, with the three major indices fluctuating—Dow down 0.62%, S&P down 0.24%, marking a three-day decline, and Nasdaq slightly rebounded 0.23%. European markets were broadly under pressure, with German stocks down 0.63%, UK stocks down 0.68%, and French stocks down 0.23%.

In the crypto assets sector, Bitcoin increased 0.60% within 24 hours to $87.42K, while Ethereum slightly declined 0.12% to $2.94K. The crude oil market saw a significant drop, with WTI falling 2.66% to $55.17 per barrel; gold slightly decreased 0.06% to $4,302 per ounce. The U.S. 10-year Treasury yield fell 4 bps to 4.14%, and the dollar index declined 0.04%.

Non-Farm Payroll Data Warning: Unemployment Rate Hits Recent Highs

The U.S. Department of Labor released November employment data, raising market concerns. Non-farm employment increased by 64,000 jobs, exceeding the market expectation of 45,000, but the unemployment rate rose to 4.6%, the highest since September 2021, above the expected 4.4%.

Alarmingly, the private sector has averaged only 44,000 new jobs per month over the past six months, the slowest pace since the post-pandemic economic recovery began. In unrounded, revised data, the unemployment rate reached 4.564%, up 12.4 bps from September. Fed Chair Jerome Powell has indicated that the unemployment rate could rise another 0.1 to 0.2 percentage points.

Behind the freezing of corporate hiring, some reasons point to AI automation—many companies believe existing tasks can be replaced by AI, reducing urgency to hire. Meanwhile, revised non-farm jobs in October decreased sharply by 105,000, the largest decline since late 2020.

Interest Rate Decision: New Variables Emerge

Federal Reserve interest rate futures show only a 24% chance of a rate cut again in January, unchanged from the previous day. The 2-year U.S. Treasury yield initially fell then rebounded, while the 10-year yield surged and then retreated. Currently, the 10-year Treasury yield, oil prices, and the dollar are declining simultaneously, reflecting heightened market concerns about a U.S. recession.

Economic Outlook Snapshot

U.S. retail sales in October were flat month-over-month, with retail sales excluding autos increasing 0.4% MoM, slightly better than the expected 0.3%. The December services PMI preliminary reading was 52.9, below the forecast of 54; the composite PMI preliminary was 53, also below the expected 53.9; manufacturing PMI preliminary was 51.8, slightly below the forecast of 52.1.

OECD Secretary-General Mathias Cormann stated that surging AI investments are driving global growth, with continued increases expected. In the medium to long term, accelerated AI adoption will boost productivity. However, OECD forecasts global economic growth will slow to 2.9% in 2025, below this year’s expected 3.5%, with trade headwinds possibly intensifying further.

Tech Giants Movement: Tesla Hits New High

Tesla’s stock surged over 3% to a new high, becoming the seventh-largest U.S. company by market cap. Nvidia rose 0.81%, Meta increased 1.49%, Microsoft gained 0.33%, Apple rose 0.18%, Amazon was nearly flat with a 0.01% increase, and Google declined 0.54%.

Morgan Stanley predicts that as technological and regulatory milestones are achieved, Tesla’s Robotaxi fleet will expand from a few vehicles now to about 1,000 by 2026. The most critical catalyst will be the upcoming safety-supervised testing, with Cybercab expected to start production in April 2026.

Global Policies and Negotiations

The U.S. government has threatened retaliatory measures against the EU in response to its digital tax policy, citing companies like Accenture and Siemens as potential targets for new restrictions or charges. The U.S. Trade Representative’s Office stated that if the EU continues discriminatory practices, the U.S. will deploy all available tools to counteract.

The next Chair of the Federal Reserve will be announced in early January next year. U.S. Treasury Secretary Janet Yellen said that final one or two interviews will be conducted this week, and Trump will decide whether to appoint Federal Reserve Board member Lael Brainard or former Fed official Waller.

Today’s Key Events

• UK November CPI monthly rate
• UK November Retail Price Index monthly rate
• Germany December IFO Business Climate Index
• Fed Governor Waller speech
• Fed Williams speech
• U.S. weekly EIA crude oil inventories through December 12