The New York Stock Exchange opened slightly higher on Friday, welcoming rather calmly a very high job creation figure which could encourage the American central bank (Fed) to wait before a rate cut.
Around 3:45 p.m. GMT, the Dow Jones gained 0.18%, the Nasdaq index gained 0.56% and the broader S&P 500 index gained 0.44%.
The American economy created 303,000 jobs in March, according to the Department of Labor, significantly more than the 200,000 expected by economists. This is the highest figure since May 2023.
“This data shows that the US economy is not losing momentum,” Sophie Lund-Yates of Hargreaves Lansdown commented in a note.
“This is a step in the wrong direction and the Federal Reserve (Fed) still has several red lights blocking the path to rate cuts,” she added.
Operators now assign a probability of more than 45% to the scenario including only two cuts in the Fed’s key rate this year, compared to less than 20% a month ago.
Following the publication of the employment report, the yield on 10-year US government bonds approached 4.40%, compared to 4.30% the day before at close.
However, futures contracts on the main indices, in the green before this flurry of figures, remained on the rise and the New York market opened with gains.
“I think the market was expecting an even higher number,” said Sam Stovall of CFRA, explaining the phlegmatic reaction of stocks.
Investors also put into perspective the scope of the main figure, i.e. the 303,000 job creations, and noted that the average salary had only increased by 0.3% over one month, in line with expectations.
Furthermore, the labor market participation rate of the working-age population has increased and is at its highest since November, an element likely to rebalance the relationship between supply and demand.
For Chris Zaccarelli of Independent Advisor Alliance, although the job creation figure is well above expectations, “this could be good news for stocks.”
“To the extent that consumption and corporate profits are more important to them than the timing of the Fed’s rate cut, stocks have room to rise based on this report,” he detailed.
But for Sam Stovall, the strength of the labor market could, on the contrary, “reinforce the pressure (on stocks) and encourage a correction that is long overdue.”
On the stock market, the specialist in cardiovascular disease prevention equipment Shockwave progressed (+1.71%) after the announcement of its upcoming takeover by Johnson & Johnson (-0.01%), for around $13.1 billion. .
Technology stocks were once again in high spirits, in particular Meta (+1.58%), whose stock has jumped more than 45% since the start of the year.
Conversely, semiconductor veteran Intel was still losing ground (-2.05%), after revealing, on Wednesday, a colossal loss in its foundry business, which manufactures chips designed by others. The value is at its lowest level in almost six months.
Target of speculators, the media group Trump Media and Technology Group (TMTG) remained in the red (-4.14%). The stock has lost more than 40% since its peak last week, further reducing the windfall that Donald Trump could recover if he sells his shares.
The specialist marketing software publisher HubSpot (+4.97%) was still sought after (+3.91%) after the Reuters agency reported on Thursday a possible takeover by Alphabet.
2024-04-05 15:26:42
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