Wall Street in the green, after vigorous employment figures

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(Boursier.com) — Wall Street progressed this Friday, the S&P 500 gaining 0.32% to 5,718 pts and the Nasdaq 0.62% to 18,030 pts, compared to a gain of 0.13% for the DJIA to 42,067 pts . Traders showed a very positive initial reaction to the robust report on the US employment situation, but the trend is a little more uncertain now. It must be said that this report also means that the Fed will have less room to maneuver to relax its policy. In addition, according to Joe Biden, the United States is discussing potential Israeli strikes against Iranian oil installations, following the missile attack launched by Iran against Israel. Biden also said he was opposed to Israeli strikes against Iranian nuclear facilities.

According to the US Department of Labor this Friday, non-agricultural job creations in the United States for the month of September 2024 stood at 254,000, compared to a consensus of only 140,000 and a revised reading of 159,000. (compared to 142,000) a month earlier. Job creations in the private sector numbered 223,000, compared to a consensus of 125,000 measured by FactSet and a level of 114,000 for the previous month. The unemployment rate stood at 4.1%, compared to a market consensus of 4.2% and a level of 4.2% also a month earlier. Note also that the manufacturing segment destroyed 7,000 jobs in September compared to 27,000 in August.

The average hourly wage increased by 0.4% compared to the previous month and by 4% over one year, against the consensus of 0.3% and 3.8% respectively. The labor force participation rate was 62.7%. Employment continued to increase in food services and drinking places, health care, government, social welfare services and construction. The change in total nonfarm payroll employment for July was revised upward by 55,000, from 89,000 to +144,000, and the change for August was revised upward by 17,000, from +142,000 to +159,000.

US employment data published since the start of the week had already been relatively strong. Job openings in the United States for the month of August 2024 stood at 8.04 million according to the Department of Labor, well above the consensus of economists which stood at 7.68 million according to FactSet. A month earlier, these job openings numbered 7.71 million. According to the ADP report the day before yesterday, job creation in the private sector in the United States for the month of September 2024 stood at 143,000, compared to a market consensus of 125,000.

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John Williams, head of the New York Fed, also spoke today, but did not comment on monetary policy in his prepared remarks. Austan Goolsbee of the Chicago Fed told Bloomberg TV that the jobs report was “superb,” ​​but that other measures showed a cooling of the labor market and that the rate cuts should continue in the coming years. 12 to 18 months.

Remember that the week began with an intervention without much surprise from Fed President Jerome Powell. After an initial rate cut of half a point on September 18, the Fed is expected to continue on November 7. According to the CME FedWatch tool, there is now more than 94% probability that the American central bank will opt for a gesture of 25 basis points, and around 5% ‘probability’ that it will make another strong gesture of 50 pb. The probability of a moderate move of 25 bp has just risen sharply following the employment report, and hopes of a further cut of half a point seem to have been swept away. The CME FedWatch tool gives 71.7% probability for the 4.25-4.5% range on rates at the end of the year and 26.9% for the 4-4.25% range.

On the Nymex, a barrel of WTI crude rose another 0.8% to $74.3 with geopolitical uncertainty. An ounce of fine gold stabilizes at $2,656. The dollar index gains 0.5% against a basket of reference currencies.

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Ford (stable) remains monitored Friday, as a U.S. auto safety regulator said it is investigating more than 368,000 Ford crossover SUVs in the country for potential loss of braking caused by brake hose failure. rear brake. According to Reuters, the preliminary assessment would cover certain Ford Edges from model years 2015 through 2017. Reuters cites the National Highway Traffic Safety Administration. The complaints also allege that the loss of braking ability occurs without any prior warning and results in a longer stopping distance, NHTSA insisted. Ford had already recalled 488,000 Ford Edge and Lincoln MKX vehicles in 2020 in the United States for brake hose failures, adds Reuters.

Rivianthe American manufacturer of electric vehicles, fell 6% on Wall Street. The group said the shortage of parts used in its R1S and R1T vehicles as well as its delivery vans began in the third quarter and worsened. Rivian therefore now expects production for the whole year to be between 47,000 and 49,000 vehicles, down significantly from its previous forecast of 57,000 units. Rivian now plans to make fewer vehicles than last year. According to today’s publication, Rivian Automotive produced 13,157 vehicles at its Normal, Illinois, manufacturing plant and delivered 10,018 vehicles in the quarter ended at the end of September.

Rivian cites production disruptions due to a shortage of a shared component on the R1 and RCV platforms. This impact of supply shortage therefore began in the third quarter of this year, “has intensified in recent weeks and continues”, according to the group. The company nevertheless reaffirms its outlook for annual deliveries of low single-digit growth compared to 2023, i.e. between 50,500 and 52,000 vehicles.

Spirit Airlines (-25%), the American airline, is said to be in talks with bondholders on the terms of a possible bankruptcy filing following the failure of its merger with its rival JetBlue Airwaysthe Wall Street Journal reported yesterday. The airline has also reportedly considered restructuring its balance sheet through an out-of-court settlement, although recent discussions have been more focused on reaching an agreement with bondholders and other creditors to support filing for Chapter 11 of the bankruptcy law, the WSJ reported, citing people familiar with the matter. The timing of the bankruptcy placement is not specified, but is not yet believed to be imminent.

Netflix (+1%). Netflix co-CEO Greg Peters reacted to the rumor that the platform is considering offering a 100% free plan, financed by advertisements. In an interview with ‘Echos’, Peters wanted to clarify the position of the world leader in streaming on this subject, denying the intention to offer a free offer. In response to the question of whether Netflix would offer such an offering, similar to that of YouTube, he underlined the fundamental distinction between the two platforms: “Netflix and YouTube come from very different starting points. They have put advertising at the heart of their model and added a thin subscription layer on top. We, on the other hand, come from content.

Tesla (+4%). Elon Musk will attend Donald Trump’s political rally this week in Butler, Pennsylvania, the town where he survived an assassination attempt in July. The billionaire announced this on the social network X, in response to a message from the presidential candidate indicating that he was returning to Butler on Saturday. Elon Musk, Tesla’s chief executive and owner of X, called the Republican presidential candidate “tough” and officially endorsed him after he survived an assassination attempt in Butler on July 13. The October 5 rally will be held at the same location where Trump was shot in the right ear and where a protester was killed when a gunman opened fire.

Meta (stable) unveiled an AI video generator. Facebook’s parent company has launched a new artificial intelligence tool capable of generating or editing videos based on a simple ‘prompt’. Mark Zuckerberg’s group therefore remains very offensive in generative AI, facing rivals like OpenAI and Google. Meta’s product, Movie Gen, will be able to create a new video up to 16 seconds long based on a prompt and use the same message to generate sound or edit an existing video, or even use a photo to create a personalized video featuring a real person. Movie Gen is only available to select employees and a handful of external partners. Integration into the group’s applications is planned for next year.

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