After “Earthquake” because of McCarthy
US job data makes investors on Wall Street breathe a sigh of relief
October 5, 2023, 12:11 a.m
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The jobs data somewhat eased Wall Street investors’ concerns about U.S. politics. The labor market data plays a particularly important role in the US Federal Reserve’s interest rate decisions. Nevertheless, analysts are urging caution following the fall of McCarthy in the US House of Representatives.
Interest rate hopes according to a report by US personnel service provider ADP make investors on Wall Street cautiously optimistic. The Dow Jones Index The standard values were stable today at 32,978 points. The broader one S&P 500 advanced by 0.2 percent to 4238 points. The technology stock market index Nasdaq gained 0.7 percent to 13,153 jobs.
According to ADP data, 89,000 jobs were created in the USA in September. Experts polled by Reuters had expected 153,000 new jobs. This fueled hopes that monetary policy tightening would end soon US Federal Reserve Bank. The monetary authorities are trying to combat inflation and cool down the hot labor market by raising interest rates. “The ADP report gave investors a reason to be cautiously optimistic about U.S. government payroll data scheduled for Friday,” said Sam Stovall, chief strategist at CFRA Research.
The relief following the ADP survey partially alleviated investors’ concerns about the removal of the leader of the US House of Representatives. However, analysts urged caution. “Wall Street probably hasn’t fully processed the political earthquake in the USA yet,” said Konstantin Oldenburger, analyst at broker CMC Markets.
Fall of McCarthy “a dramatic event”
The overthrow of Kevin McCarthy, which initially rendered the congressional chamber unable to act, was “a dramatic event” and proved once again that the USA is divided into two camps in terms of politics and people. In addition, the latest developments in Washington could also represent a turning point in the Ukraine conflict and mark a political turning point for the global economy.
Meanwhile, expectations of an imminent interest rate peak depressed the US currency. The Dollar index lost 0.3 percent to 106.79 points. The Euro In return, it gained 0.4 percent to $1.0501. Investors grabbed government bonds. The yield on ten-year US bonds accordingly interrupted its upward trend and stood at 4.745 percent after 4.802 percent the previous day.
Meanwhile, oil prices extended the losses of the last few days. The North Sea variety Brent and the light US variety WTI lost almost five percent each to 86.55 and 84.84 dollars per barrel (159 liters). “Investor attention has shifted from short-term supply constraints to the impact of long-term high interest rates on demand,” said Callum Macpherson, an analyst at banking group Investec. “The question also remains what steps OPEC+ will take at its next meeting on November 26th.” After their meeting, the oil cartel said it would not initially change its current course on production cuts.
Falling oil prices are affecting energy companies
The falling oil price depressed the shares of energy companies Exxon Mobil, Chevron and Marathon Oil, which lost between 2.8 and 6.2 percent. Meanwhile, expectations of an imminent interest rate peak supported growth stocks. The papers of corporations like Microsoft, Amazon, Meta and alphabet gained between a good one and almost two percent.
On the other hand, shares came under pressure Helen of Troy. The consumer goods provider’s stocks fell by a good eight percent. The company reported a decline in sales and profit in the second quarter due to lower demand.