November 21 Financial Market Brief: Non-farm payroll data exceeds expectations, US stocks experience rollercoaster, tech stocks under pressure

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US Stocks Open Higher, Close Lower; Tech Stocks Lead Decline

On Thursday, US stocks experienced a typical “roller coaster” session. The market initially rose on strong Q3 earnings from NVIDIA and September non-farm payrolls far exceeding expectations, with the Nasdaq soaring over 2.5%. However, as investor caution about valuation risks increased, US stocks ultimately retreated across the board. The Dow fell 0.84%; the S&P 500 declined 1.56%; the Nasdaq dropped 2.15% to 22,078 points. Chinese concept stocks performed even weaker, with the Golden Dragon Index down 3.26%. European markets performed relatively steadily, with Germany’s DAX 30 up 0.5%, France’s CAC 40 up 0.34%, and the UK FTSE 100 slightly higher by 0.21%.

Non-Farm Payroll Data Analysis: Job Growth Surpasses Expectations, Unemployment Rises

In September, US non-farm payrolls increased by 119,000 jobs, significantly exceeding the market forecast of 50,000. However, behind this bright spot lies concern—the unemployment rate rose from 4.3% in August to 4.4%, hitting a four-year high. Notably, August employment data was revised downward by 4,000, indicating the labor market is indeed cooling.

Economists estimate that currently, the economy needs to create only 30,000 to 50,000 jobs per month to keep pace with the growth of the working-age population, well below the roughly 150,000 needed in 2024. The proliferation of artificial intelligence is eroding employment opportunities, especially entry-level positions, posing greater challenges for recent graduates. Some analysts believe that trade policies under the Trump administration have created economic uncertainty, further weakening corporate, especially small and medium-sized enterprise, hiring intentions.

Federal Reserve Divergence Grows, Rate Cut Expectations Continue to Diminish

This non-farm report is the only major employment indicator ahead of the Fed’s December meeting, but market odds of a rate cut in December have fallen below 40%. The US Treasury market reflects renewed recession fears, with the 10-year Treasury yield dropping 5 basis points to about 4.08%.

Fed Governor Cook warned that stock, corporate bond, real estate, and leveraged loan markets are all at historic highs, suggesting valuations could face significant corrections. Chicago Fed President Goolsbee stated that despite the strong US economic fundamentals, he is uneasy about too rapid rate cuts, believing inflation will be difficult to bring down significantly in the coming months. Cleveland Fed President Harker warned that cutting rates to support employment could prolong high inflation and increase financial stability risks. She emphasized that the Fed needs to balance price stability with maximum employment.

Goldman Sachs Warns: Trend-Following Funds May Sell Off Stocks Significantly

Goldman Sachs indicated to clients that after the S&P 500 broke below the 6725 level, trend-following hedge funds will trigger a selling mechanism. Goldman estimates that in the next week, $39 billion worth of stocks could be sold globally. If prices continue to decline, systemic trend funds could sell up to $65 billion. Data shows these hedge funds previously held about $150 billion worth of global stocks long.

Cryptocurrency Market Follows the Adjustment

Bitcoin has fallen 5.41% in 24 hours, currently at $86,527; latest data shows a current price of 92.67K, with a 24-hour change of -1.21%. Ethereum has dropped 6.37% in 24 hours, currently at $2,830; latest data shows a current price of 3.25K, with a 24-hour increase of +2.13%. The crypto market is highly correlated with traditional financial market risk sentiment, and investors tend to adjust digital asset positions simultaneously when risk aversion increases.

Many investors are concerned about fund delistings, such as questions like “Will I get my money back if an ETF is delisted?” In fact, when an ETF is delisted, investors’ holdings are liquidated at NAV, and they receive cash accordingly, usually without capital loss. In volatile markets, understanding these basics is crucial for asset protection.

Commodities and Forex Markets

Gold slightly down 0.02% to $4,076 per ounce; WTI crude oil down 1.09% to $58.7 per barrel. The US dollar index rose 0.1% to 100.2; USD/JPY up 0.19%; EUR/USD down 0.09%.

Hong Kong Stock Index Futures

Hang Seng Index night session futures close at 25,460 points, down 388 points from yesterday’s close of 25,835; China Enterprises Index night session futures close at 9,012 points.

Company News

Apparel Retailer Gap Performs Well: Q3 same-store sales grew 5%, the strongest since the holiday season of fiscal 2017, surpassing Wall Street’s expected 3.1%. Net profit declined 14% year-over-year to $236 million, but EPS of 62 cents exceeded expectations of 59 cents; revenue increased 3% to $3.94 billion, above the forecast of $3.91 billion. The company expects full-year sales to reach the upper end of previous guidance, with growth of 1.7% to 2%.

Google Launches New AI Image Editing Tool: Google announced Nano Banana Pro, an image generation and editing tool based on the Gemini 3 Pro model, capable of combining search info to generate charts, diagrams, and images, with a maximum of 14 images merged. The Pro version will be available for free via the global Gemini app but with usage quotas.

SoftBank Expands Investment in OpenAI: SoftBank plans to invest up to $3 billion to retrofit an electric vehicle factory in Ohio, used to produce equipment for OpenAI’s data centers.

Geopolitical Developments

Ukrainian President Zelensky has officially received the draft peace plan for the Russia-Ukraine conflict submitted by the US. Both sides have reached a consensus on an “active timetable” for signing an agreement based on the plan, and Zelensky will hold in-depth discussions with President Biden via phone soon. Ukrainian and US teams will jointly develop specific action plans to work toward a dignified resolution to end the conflict.