© Reuters
Investing.com – Wall Street looks set to end the year on a positive note as traders await next week's crucial payroll report. Boeing received positive news from China, while Nvidia launched a new gaming chip in the important Chinese market.
1. Futures point to further gains at the end of the year
U.S. stock futures rose slightly on Friday and are expected to cap off a strong year on Wall Street on a positive note.
As of 05:30 ET (10:30 GMT), the contract was up 25 points, or 0.1%, up 5 points, or 0.1%, and up 22 points, or 0.1%.
The three major indexes have benefited from an impressive late rally with the Federal Reserve signaling that its extended cycle of interest rate hikes is coming to an end and rate cuts are likely in 2024.
The DJIA is expected to end 2023 over 13% and 24% higher, respectively, with the latter less than 0.5% below its highest closing level set in January 2022. The DJIA is on track to post a gain of over 44%. This would be the largest annual increase since 2003.
2. Nvidia launches new gaming chip for China
Nvidia (NASDAQ:), the US chipmaker, has launched a new version of a gaming chip designed to comply with US export controls for China.
This chip is the first the company has released since export rules unveiled by the Biden administration in October resulted in a ban on sales of artificial intelligence chips designed for the Chinese market.
Nvidia was one of the year's main stars, benefiting from rising interest in artificial intelligence, leading it to join an elite club of US companies with a market value of $1 trillion.
Nvidia has more than 90% share of China's $7 billion AI chip market, and U.S. restrictions have raised concerns that the company could lose market share to domestic companies.
3. December payroll is just around the corner
U.S. stock markets had a strong end to the year, benefiting from expectations that the Federal Reserve will begin cutting interest rates in 2024, leading to a so-called “soft landing.”
Economic growth has cooled and inflation has eased, but the economy has shown little sign that months of tighter monetary policy will lead to a severe downturn.
The key to whether this mindset continues will be the health of the U.S. labor market in the new year.
Data released Thursday showed the number of Americans applying for unemployment benefits rose by 12,000 to 218,000 last week, suggesting the job market will continue to cool in the fourth quarter of the year.
Most eyes will be on next week's December report, however, as the U.S. economy is expected to have added 158,000 jobs in December, up from 199,000 in November.
4. Boeing's 737 MAX is flying in China again
Boeing (NYSE:) reached another major milestone on Friday after the US planemaker confirmed that all 737 MAX jets operated by Chinese airlines are now back in service following the global grounding in 2019.
The company's best-selling model was withdrawn from the market more than four years ago after several fatal accidents. Although operations generally resumed in late 2020, Chinese airlines were late to the party and did not begin flying again until January 2023.
This restart would greatly benefit the company as it would allow the airline to offload dozens of aircraft from its inventory.
5. Oil is rising, but significant annual losses lie ahead
Oil prices rose slightly on Friday, recovering from sharp losses in the previous session, but are expected to end the year near their lowest level since 2020, when the pandemic drove prices lower.
At 5:30 a.m. ET, futures were trading 0.1% higher at $71.83 a barrel, while the contract rose 0.3% to $77.39 a barrel.
Prices fell about 3% on Thursday as major shipping companies began returning to the Red Sea, easing concerns about supply disruptions in this key region.
Helping prices recover was the U.S. reporting a much larger-than-expected decline in crude oil inventories, with inventories falling by 7.1 million barrels in the week ended Dec. 22.
Still, crude oil benchmarks are on track to end the year about 10% lower as production cuts by some major producers proved insufficient to support prices amid a slowing global economy and a series of aggressive interest rate hikes to combat the run-up Inflation consideration.
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