The latest non-farm payrolls report was much higher than expected, but the unemployment rate rose and average hourly earnings unexpectedly slowed. The “Goldilocks” employment report stimulated risk appetite. U.S. stocks plunged in early trading on Friday (6th), regained their losses during the session, and fell sharply in late trading. Technology stocks surged, with the three major indexes closing up more than 1%.Dow JonesClosed nearly 300 points in the red.
The bond market sold off after employment data was much stronger than expected.10-Year Treasury Bond YieldIt climbed to a new high near 4.88%, then fell back, but was still up about 6 basis points at 4.78%.
In terms of data, a report released by the U.S. Bureau of Labor Statistics on Friday showed that the number of new non-farm payroll jobs in the United States rose to 336,000 in September, much higher than the expected 170,000, indicating that the U.S. labor market remains tight. The U.S. unemployment rate in September was 3.8%, higher than the expected 3.70%, and average hourly wage growth slowed. Analysts pointed out that this highlighted the increase in labor supply and helped alleviate wage inflation.
On the political and economic front, Wall Street Journal reporter Nick Timiraos, known as the “Federal Reserve’s mouthpiece,” wrote an article on Friday pointing out that the number of new jobs far exceeded market expectations and wage growth has slowly cooled. At the same time, the unemployment rate is 3.8%, which is close to the lowest trend in history and has not been broken.
“The silver lining is that we’re not seeing significant wage increases, which would ultimately impact costs and drive up inflation,” said former Fed governor Randall Kroszner.
According to the CME FedWatch tool, traders believe that the Fed is more likely to raise interest rates this year and are pricing in a delay in the Fed’s rate cut from July 2024 to September.
There is hope that the strike will not be expanded by the United Auto Workers (UAW) to launch a strike against the three U.S. auto giants General Motors, Ford and Stellantis, with General Motors agreeing to produce electric vehicle batteries under a comprehensive agreement.
In terms of geopolitics, the Biden administration is about to update regulations that “restrict the export of chips and chip manufacturing tools to China.” Several companies, including Huida, Marvell and Intel, may face additional restrictions on chip exports, Barclays said.
There are also rumors in the market that the Biden administration is facing pressure from Congress, and RICS-V technology may be controlled by U.S. legislation, prompting the escalation of the U.S.-China chip war.
In addition, the European Union is formulating a plan to postpone tariffs on electric vehicle sales between the UK and the EU for one year in an attempt to resolve the dispute with the UK.
Performance of the four major U.S. stock indexes on Friday (6th): 10 of the 11 major S&P sectors ended in the red, but consumer staples ended lower. (Image: finviz) Focus Stocks
The five kings of science and technology are collectively flourishing. Meta(META-US) rose 3.49%; Apple (AAPL-US) rose 1.48%; Alphabet (GOOGL-US) rose 1.86%; Microsoft (MSFT-US) rose 2.47%; Amazon (AMZN-US) rose 1.59%.
Dow JonesMore than half of the constituent stocks rose. Salesforce (CRM-US) rose 2.65%; Disney (DIS-US) rose 2.64%; Honeywell (HON US) rose 2.58%; Kaifeng Heavy Industry (CAT-US) rose 2.01%; Walmart (WMT-US) fell 1.68%.
half feeComponent stocks generally closed higher. Qualcomm (QCOM-US) rose 0.98%; Huida (NVDA-US) rose 2.40%; Micron (MU-US) rose 1.49%; Applied Materials (AMAT-US) rose 0.73%; AMD (AMD-US) rose 4.21%; Deyi (TXN-US) rose 1.22%.
Taiwan stock ADRs surged upward. TSMC ADR (TSM-US) rose 2.60%; ASE ADR (ASX-US) rose 1.58%; UMC ADR (UMC-US) rose 2.44%; Chunghwa Telecom ADR (CHT-US) rose 0.50%.
Corporate News
The UAW has temporarily given up on expanding its strike, and the UAW reached an agreement with General Motors to include workers at a new battery joint venture in a new labor contract. General Motors (GM-US) closed up 1.95%, Ford (F-US) rose slightly by 0.84%, Stellantis ADR (STLA-US) rose 3.02%.
Tesla (TSLA-US) closed at a 0.18% dividend to $260.53 per share. Tesla lowered the prices of some Model 3 and Model Y versions in the United States on Friday after its third-quarter vehicle deliveries were lower than market expectations. Gary Black, a Tesla investor and managing partner of Future Fund, believes that price cuts will have a negative impact on Tesla’s profits.
Microsoft (MSFT-US) rose 2.47% to $327.26 per share. Microsoft plans to close the deal with Activision Blizzard next Friday.
Energy giant Exxon Mobil is in talks to acquire shale oil company Pioneer Natural Resources for about US$60 billion, and the merger negotiations between the two parties are nearing completion. Pioneer (PXD-US) surged 10.45% to $237.43 per share.
The U.S. Food and Drug Administration considers Dutch electronics giant Philips (PHG-US) Philips ADR (PHG-US) plunged 7.20% to $18.29 per share.
Palantir (PLTR-US) closed 5.06% higher at $16.61 per share. Palantir, which analyzes large amounts of medical data and uncovers patterns that save costs and even lives, is reportedly the first choice for historic reforms to the UK’s National Health Service (NHS). This contract is very profitable. The five-year agreement will generate up to $579 million in revenue for the data analytics company and could push more health care systems and hospitals to consider Palantir’s software.
Economic data: The U.S. non-farm payroll employment in September was 336,000, compared with the expected 170,000, and the revised previous value of 227,000. The U.S. unemployment rate in September was 3.8%, compared with the expected 3.7%, and the previous value was 3.8%. The U.S. weekly average in September Working hours were 34.4 hours, compared with 34.3 hours expected, and the previous value was 34.4 hours. The average hourly wage growth rate in the United States in September was 4.2%, compared with 4.3% expected, and the previous value was 4.3%. The average hourly wage growth rate in the United States in September was 0.2%, expected. 0.3%, the previous value was 0.2%. The U.S. labor force participation rate in September was 62.8%, which was expected to be 62.8%, and the previous value was 62.8%. Wall Street analysis
The Economics Department of ABN Amro said: “The non-farm payrolls report shows that the overall situation is quite ‘Gordilocks’, with strong employment growth accompanied by continued slowing inflation, but it is important not to rely too much on single-month data. If anything, If anything, the recent sharp sell-off in the bond market has reinforced our confidence that the Fed will not raise interest rates further.”
The “Goldilocks Economy” refers to a situation where the economy is growing at a moderate pace and inflation is also moderate, which is conducive to continued market growth.
However, Seema Shah, chief global strategist at Principal Asset Management, said: “The surge in non-farm payrolls data may not be good news for the market. It not only indicates that the economy is overheating, but the Federal Reserve will need to respond with more interest rate hikes. “
Joe Terranova, senior managing director at Virtus Investment Partners, said: “The bond market has been very volatile. So, no matter what, the September non-farm payrolls report has a significant impact on market trends. Because fixed income assets continue to be volatile now, investors are worried uncomfortable.”
Marko Kolanovic, chief global market strategist at JPMorgan Chase, pessimistically believes that if an economic recession occurs, the S&P may suffer a 20% sell-off.
Manish Kabra, head of the U.S. stock strategy department at Societe Generale, judged: “The S&P Index will still have opportunities to buy on dips in the next six months. It is expected that the profit cycle will improve in the next six months, and cyclical data such as ISM will continue to play a key role in consumer spending.” It rose to 55 before the downturn led to a sell-off in U.S. stocks, and earnings growth is expected to accelerate in the next two quarters.”
The figures are all updated before the deadline, please refer to the actual quotation.
2023-10-06 21:20:47
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