A New York Stock Exchange operator (GETTY IMAGES NORTH AMERICA/AFP/SPENCER PLATT)
The New York Stock Exchange opened higher on Friday, buoyed by a US jobs report that reflected a weaker labor market, giving some investors hope that the US central bank (Fed) will moderate its monetary trajectory.
Around 2:05 p.m. GMT, the Dow Jones advanced 0.27%, the Nasdaq index took 0.05%, and the broader S&P 500 index gained 0.32%.
After a mixed session on Thursday, the indices were in the green after the publication of the monthly US employment report, according to which 315,000 jobs were created in August, significantly less than the 526,000 new jobs in July.
Another sign of a slowdown, the unemployment rate rose slightly to 3.7%, against 3.5% the previous month.
“It was a good report, in the sense that it was neither too good nor too bad,” commented Peter Cardillo of Spartan Capital.
Economists also noted the moderation in the rate of increase in the average hourly wage as well as the increase in the rate of participation in the labor market, “which gives a larger reservoir for hiring and helps to stabilize wages”, according to Quincy Krosby , of LPL Financial.
These two elements support the hypothesis of a calm on the inflation front.
“The labor market is moving in the direction the Fed wants and if the CPI index”, which measures inflation and will be published on September 13, “indicates that consumer prices are slowing, this would point to an increase of only half a point” from the Fed’s key rate at its next meeting on September 21-22.
After the release of the employment report, the probability of such a scenario, as measured by operators, thus rose to 36%, against only 25% the day before, an increase of 0.75 percentage point still holding nevertheless the rope, for now.
The news was also reflected in the bond market, where the yield on 10-year US government bonds eased to 3.19%, against 3.25% the day before.
The 2-year rates, which reflect more short-term monetary policy, contracted even more, to 3.40% against 3.49%.
“There is some relief in the equity market after a terrible week,” Oanda’s Craig Erlam said in a note.
Friday’s session was deprived of a significant part of the operators, on the eve of a three-day weekend in the United States (Labor Day Monday).
On the side, Wall Street reacted badly to the appointment of Laxman Narasimhan as new CEO of Starbucks (-2.12% to 83.59 dollars), replacing the emblematic leader Howard Schultz next April.
The results above the analyst consensus boosted the semiconductor manufacturer Broadcom (+4.36% to 513.45 dollars), whose forecasts also positively surprised the market.
These figures benefited other players in the sector, such as Qualcomm (+1.04%), Texas Instrument (+0.67%) or Intel (+1.01%).
On the other hand, the graphics card manufacturer Nvidia continued to decline (-0.07% to 139.27 dollars) after a first dropout the day before. Uncertainty remained as to the exports of certain graphics processors of the group to China, which the American authorities indicated that they wanted to restrict, before doing an about-face.
The sportswear chain Lululemon pranced (+11.08% to 327.07 dollars) after the publication of better than expected quarterly results and ambitious forecasts. The group has preserved its margins despite inflation and is not suffering from the slowdown in demand which is affecting other brands.
© 2022 AFP
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