5 Things You Need to Know to Start Your Day

Good morning. The Fed says it may keep rates higher for some time, stocks claw back from a bruising two-day selloff and tensions in the Midd [View in browser]( [Bloomberg]( Good morning. The Fed says it may keep rates higher for some time, stocks claw back from a bruising two-day selloff and tensions in the Middle East boost oil. Here’s what’s moving markets. [— Charlotte Hughes-Morgan](. Restrictive rates Minutes from the Federal Reserve’s [December meeting]( released yesterday suggested rates could remain at restrictive levels “for some time” until a durable move down in inflation can be seen. Fed policymakers nonetheless acknowledged rates had probably peaked and they would begin cutting in 2024. The minutes indicated increased optimism among participants about the path of inflation, noting “clear progress.” The committee gave no indication easing could begin as soon as March, prompting traders to temper bets: rather than March the first cut is now fully priced in for May. Market respite Futures trading suggests US stocks are poised to snap out of their run of declines as contracts on the S&P 500 and Nasdaq 100 ticked 0.1% higher. [European indexes]( clawed back from one of the [worst starts to the year]( in decades. Treasuries fell. Boiling over Fears that a wider war in the Middle East will create havoc for oil supplies is driving up the price of oil. Crude is up nearly 1% as tensions in the crude-producing region escalate and after Libya’s largest oilfield [halted production](. Global benchmark Brent rose toward $79 a barrel, while West Texas Intermediate traded near $73. Meanwhile, the Houthis, a Yemen-based rebel group backed by Iran, have been censured by more than a dozen countries including the US for [attacks]( in the Red Sea that disrupted global shipping routes. Tech troubles A climbdown in shares of the so-called [Magnificent Seven](, which includes the likes of Apple, Amazon, Microsoft and Alphabet, has stretched to the longest streak of losses in a month. Apple is leading declines that have erased $383 billion in market value. Elsewhere, things are also looking bleak for smaller tech companies as new data shows [Silicon Valley start-ups]( had their worst funding year since 2019 last year. Coming up We’ll get initial jobless claims today alongside ADP employment change data before nonfarm payroll data tomorrow. The labor market data is seen as key in deciding the Fed’s course for rate cuts. Tune into Bloomberg’s Daybreak [podcast]( today for a discussion of unsealed documents related to Jeffrey Epstein. What we’ve been watching This is what’s caught our eye over the past 24 hours. - [Harvard’s Gay]( defends research after plagiarism attacks - Wall Street’s ambitions in [China]( are running into a rising firewall - But China’s international air travel market is set to ramp up with targets for more direct [China-US flights]( - TikTok aims to grow its [US shopping business]( to as much as $17.5 billion - Citi alumni are planning [Bitcoin securities]( that don’t need SEC approval - Microsoft adds an [AI key]( in the first change to its PC keyboard in decades - Russian oil is losing its [competitive edge]( in India as prices rise And finally, here's what Joe’s interested in this morning Tomorrow is jobs day. So while we wait for that, here's two quick things on my mind: First, we just got the November JOLTS report. The total number of job openings came in a little bit lower than expected. Probably more importantly, the Quit Rate fell to 2.2%. Quits rise when people are feeling confident about their finances and prospects of finding another job. Or when they already have another job lined up. So it's notable that this measure is actually now lower than it was pre-pandemic. It's one of the rare activity metrics that's below 2019 levels. It's just one number, but it's certainly something to watch if you're looking for signs of labor market loosening. Second, [today's new Odd Lots]( is with recurring guest [Craig Fuller](, the founder and CEO of FreightWaves. We've had him on a bunch of times to take the temperature of the freight and logistics industry, and among other things we discuss shipping disruptions in the Red Sea. We also discuss the where we are in the hyper-cyclical US trucking industry, which has had like 3 or 4 boom or bust cycles in just the last 5 years. Right now, the industry is kind of down in the dumps, with poor pricing, but as he notes it's only a matter of time before the pendulum swings in the other direction, and everyone is feeling giddy about the industry's prospects. That said though, one reason to think that the next cycle could be different is that there's less lending happening to trucking companies, and that might limit capacity expansion. And of course, this is a specific example of a broader phenomenon whereby tighter financial conditions don't just sap demand, they also constrain the supply side. This is a common thing you hear about in housing -- tight credit constraining the production of new homes -- and it's also possibly going to show up in the freight world as well. In fact, [this was a theme in the ISM report we got yesterday](. In the anecdotal section of the report, there were two specific references to the way that higher rates impair investment. Of course it does raise some questions about the fight against inflation. Increased supply side capacity is probably unambiguously good. But before the capacity comes online, you have the spending on materials and equipment, which could be inflationary in the short term. Follow Bloomberg's Joe Weisenthal on X [@TheStalwart]( Like Bloomberg's Five Things? [Subscribe for unlimited access]( to trusted, data-based journalism in 120 countries around the world and gain expert analysis from exclusive daily newsletters, The Bloomberg Open and The Bloomberg Close. Tell us what you want to see in the Five Things newsletter! Please [take our quick survey here.]( Tell us what you want to see in the Five Things newsletter! Please [take our quick survey here.]( [Bloomberg Markets Wrap: The latest on what's moving global markets. 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