The New York Stock Exchange rose on Friday, pleasantly surprised by an indicator that showed a slowdown in wage growth, essential data for the US Central Bank (Fed) in its fight against inflation.
At around 15:10 GMT, the Dow Jones was up 0.70%, the Nasdaq index was up 0.28% and the broader S&P 500 index was up 0.65%.
The US economy created 223,000 net jobs in December, down from 256,000 in November but well above economists’ forecasts, which expected an increase of only 200,000 jobs.
In recent weeks, better-than-expected numbers have tended to frustrate the market, stoking fears of a Fed tightening of monetary policy.
But this time, index futures, which had been trading in the red, immediately reversed upon the release, setting the stage for a sharply higher open on Wall Street.
“The reason is that wage growth slowed” in December, LPL Financial’s Quincy Krosby said. Average hourly wages thus rose by 0.3% over one month, against 0.4% in November.
“It is very important”, continued the analyst, “because the Fed is trying to restore the labor market to a balance marked by wages that no longer rise”.
Another element that could calm down the labor market, the labor force participation rate has increased, which means that the labor supply is increasing.
“Even if job creation remains high and the unemployment rate remains low (3.5%), the deceleration in wages (…) could encourage the Fed to settle for a quarter-point hike (by its benchmark rate) in February, Rubeela Farooqi of High Frequency Economics said in a note.
Traders now give this assumption a two-thirds probability, while a month ago it was a minority to that of a half-point increase.
The bond market also reflected hopes of a Fed stepping up in the coming months.
The yield on 2-year US government bonds, which should better reflect monetary policy expectations than 10-year bonds, fell to 4.41%, versus 4.45% the day before.
However, momentum from the open quickly diminished on the equity side, which was undermined by the technology sector. Nasdaq giants Microsoft (-0.70%), Alphabet (-0.62%) or Amazon (-0.82%) were all down.
Not surprisingly, Tesla was once again among the biggest declines (-4.05% to $105.87), still under the influence of a slowdown in its growth and questions about its governance.
Elsewhere in the stock, Southwest Airline (+0.86% to $33.82) gained ground despite announcing that severe disruptions that led to the cancellation of more than 16,700 of its flights will cost it between $725 million and the 825 million dollars.
This financial impact, due to a shortfall but also additional expenses to fix the logistics problems that had caused the winter storm Elliott, will push Southwest into the red in the fourth quarter, the company warned.
Silvergate Capital, parent of Silvergate Bank, continues to unscrew (-11.93% to 11.07 dollars).
This small Californian bank, which has transformed into a major player in cryptocurrencies in recent years, recorded massive withdrawals in the last quarter of 2022, under the effect of the panic caused by the failure of the FTX platform.
WWE, la ligue professionnelle américaine de catch, cotée au New York Stock Exchange (NYSE), bondissait (+16,95% à 84,25 dollars) alors que son ancien patron, Vince McMahon, tente un putsch pour revenir aux handcuffs de l ‘agency.
Forced out of office last year after sexual harassment allegations, the group’s still largest shareholder announced on Thursday that he was taking over the chairmanship of the board.
The board had initially felt that his return was not timely.
