Good news need not always be bad news for markets

This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

Job explosion in December
US non-farm payrolls 256,000 in December, from 212,000 in November and above the forecast of 155,000 by the Dow Jones consensus, the US Bureau of Labor Statistics reported on Friday. The unemployment rate fell to 4.1% from 4.2% in November. Economists expected the rate to remain the same in December.

American markets in the red for 2025
Markets in the United States slumped on Friday after the job expectations report for December was released. Major US indices are now in the red for 2025. The pan-European Stoxx 600 index lost 0.84%, with all major stock exchanges closing in on negative territory. Eurozone government bond yields rose to new multi-month highs.

Why Meta had to “bend the knee to Trump”
of Meta The announcement on Tuesday that it would eliminate its third-party fact-checking was seen as an attempt to appease US President-elect Donald Trump. Here’s why Meta had to “bend the knee to Trump,” in the words of a former vice president of Facebook. Separately, CEO Mark Zuckerberg was interviewed on Friday “Joe Rogan Experience”, in which he knocked out Apple for poor innovation efforts.

Apple is losing market share in China
Apple Shares fell 2.4% after analyst Ming-Chi Kuo he wrote on Friday that, in December, the company iPhone shipments in China have fallen around 10%-12% from a year earlier, compared to flat smartphone shipments overall. Also, “there is no evidence” that Apple Intelligence is driving hardware updates or service entry, according to Kuo.

TikTok could be banned in the United States this week
On Friday, the US Supreme Court heard oral arguments in the case involving future of TikTok in the United States. U the judges generally seemed unconvinced from the main argument of TikTok that ban TikTok violates the free speech rights of its millions of users in the United States, which means the app could disappear from app stores as soon as this week.

[PRO] Inflation and bank earnings report for the week
The US consumer price index for December comes out on Wednesday. It will indicate if inflationary pressures continue to weigh on on the economy and markets, especially after non-farm payrolls for December were surprisingly high. Big banks like JPMorgan Chase, Goldman Sachs and Morgan Stanley reports earnings in the second half of the week.

Investors have worried that the Fed could stay dovish in response to the hot labor market. The probability involved in the market of a single cut this year increased to 68.5% after the work report, according to a CME Group’s FedWatch indicator.

Bond yields, which have already been elevated in recent weeks, jumped further on the release of the jobs report. U 10-year Treasury yield blame his the highest level since November 2023.

The market sell-off after the release of the employment report was prompt and not unexpected. U S&P 500 down 1.54%, the Dow Jones Industrial Average down 1.63% and the Nasdaq Composite lost 1.63%. All major indices are now in negative territory for 2025.

Good news is bad news for investors, as the saying goes.

But we must remember that the circumstances are different now than they were during the peak of inflation.

The US Federal Reserve might not be worried about a robust labor market this time around. On the contrary, a strong growth in employment probably reassures him, considering that the concern about the employment rate was one of the reasons why the Fed decided on a jumbo. Rates 50 basis points in September.

“You will never hear me complain that we had 250,000 jobs,” Chicago Fed President Austan Goolsbee. he said on CNBC’s “Squawk on the Street.” Goolsbee also noted that inflation over the past six months has been around 1.9%, or just below the Fed’s target.

In times when inflation is lower, strong employment numbers are a sign of a resilient economy.

And economic growth ultimately “means better earning potential, less risk of a recession, and that will really dictate longer-term returns versus a selloff in today’s market,” said Adam Turnquist, chief technical strategist at LPL Financial.

In other words, good news can only be good news if investors look beyond the immediate present.

— CNBC’s Jeff Cox, Michael Santoli, Pia Singh and Sean Conlon contributed to this report.