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(CercleFinance.com) – The week ended on an almost euphoric note on Wall Street, which opted for the point of view that ‘good news’, such as an ‘NFP’ at +254,000, is – just like the bad- good news.
As a result, any statistic will always be interpreted in a positive way and a consolidation of Wall Street seems more and more… impossible. The US indices completed this Friday to erase their losses from the beginning of the week and consolidated horizontally the +1% gained the previous week.
The S&P500 climbed +0.9% to 5,751 and recorded the second best close in its history… four weeks before the presidential elections, this sounds like a plebiscite for the economic management of the Biden Administration.
The Nasdaq Composite gained +1.22% to 18,138 and ended the week with a symbolic gain despite the clear deterioration of the bond markets: the index benefited from the support of AMD with +5%, Datadog +4.4% , Nvidia +1.7%, Applied Materials +1.5%.
Usually, the ‘techs’ suffer from the rise in T-Bond yields, but this Friday, the optimism of equity managers should not be disturbed by any annoyance.
The T-Bond 2034 rose by +12 basis points to 3.978% (i.e. +23 bps weekly, worst score since August 9), the ‘2-year’ by +21.4 bps to 3.882%, the ’30 years’ by +7.5 bps to 4.250%.
The assumption of a -50 bps rate cut by the Fed in early November has fallen to 20%, so it will almost certainly be -25 bps in four weeks.
The U.S. economy generated 254,000 new nonfarm jobs in September, according to the Labor Department, more than 110,000 higher than market expectations, which were generally only in the 140,000 range ( score identical to Wednesday’s ADP report).
The unemployment rate also fell by 0.1 point to 4.1%, where economists expected it to be stable at 4.2%, while the labor force participation rate remained stable. at 62.7%, and that average hourly income increased by 4% over one year.
Furthermore, the creations of non-agricultural positions for the previous two months were revised, from 89,000 to 144,000 for July and from 142,000 to 159,000 for August, i.e. a total revision balance of +72,000 for these two months.
The ‘NFP’ for the month of September was described as ‘superb’ by Austan Goldsbee, the head of the Chicago Fed. He saw an increase in business confidence in a scenario of full employment against a backdrop of controlled inflation: ‘full Goldilocks’!
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