Fight between bulls and bears
The ups and downs on Wall Street end lightly
11/04/2022 9:49 p.m
After a four-day dry spell, Wall Street is rotating properly again for the weekend. The trigger is the US labor market report for October. Signals from China also ensure an upward trend.
The guesswork about the future rate of interest by the American Federal Reserve has sent the US stock markets on a rollercoaster ride. US October jobs data presented a mixed picture, giving investors room for speculation. Of the Dow Jones Index closed 1.3 percent higher at 32,403 points after volatile trading. The tech-heavy one Nasdaq advanced 1.3 percent to 10,475 points. The broad one S&P 500 increased 1.4 percent to 3770 points.
A rise in the US unemployment rate in October initially fueled investors’ hopes that the US Federal Reserve would make fewer interest rate hikes. While the stock markets rose, the US dollar fell accordingly. The dollar index lost 1.9 percent to 110.73 points. However, according to analysts, the data as a whole does not provide any clear indications that the Fed could really step on the brakes.
At 261,000 non-agricultural jobs, job creation was stronger than analysts had expected. “There’s a real battle going on here between bulls and bears,” said Dennis Dick, market analyst at broker Triple D Trading. “The bears say the Fed won’t pivot until the data cools, while the bulls say much of this bearishness is already priced in.” The robust labor market was one of the factors that allowed the US Federal Reserve to continue raising interest rates.
Posts on social media suggesting a shift away from China’s zero-Covid policy in March eased investor fears of an economic slowdown in the Middle Kingdom. In Europe, the stock exchanges had risen sharply as a result.
Shares of Chinese companies listed in the US, including Alibaba, JD.com and Baidu, also rose by between seven and almost ten percent. Hopes for the economy fueled speculation that China’s demand for raw materials would increase, which pushed up oil prices. The price for the North Sea variety Brent rose 4.2 percent to $98.62 a barrel (159 liters). Traders also justified the increase with an expected supply shortage due to the planned EU embargo on Russian oil.
A number of company balance sheets also caused movement on the stock market. A forecast reduction broke PayPal a price loss of almost two percent. The payment service is more pessimistic about the year as a whole in view of an expected economic downturn. On the other hand, quarterly sales above market expectations and an optimistic view of the end of the year encouraged investors to buy DoorDash. Shares of the food supplier rose more than eight percent.
It also went up more than eight percent for the shares of Starbucks. The coffeehouse chain had exceeded sales expectations thanks to strong demand in the USA and business in China that was less bad than feared.