Wall Street in the green after American employment

(New York) The New York Stock Exchange welcomed strong US employment figures on Friday, which, if they raise fears that high rates will remain high for longer, seem to validate the scenario of a soft landing for the economy. economy.

The Dow Jones index advanced 0.34%, the technology-dominated NASDAQ gained 0.60%, and the S&P 500 +0.56% around 10:15 a.m. (Eastern time).

The day before, the indices had ended a mediocre start to the week on a mixed note. The Dow Jones index gained 0.03% to 37,440.34 points, the NASDAQ lost 0.56% to 14,510.30 points and the S&P 500 fell 0.34% to 4,688.68 points.

The yield on ten-year bonds rose to 4.08%, the highest in three weeks, just after the announcement that the American economy created 216,000 jobs in December, much more than expected.

The bond rate then fell to 3.97%.

This acceleration in hiring in December is significantly higher than the 162,000 forecast by the Briefing.com consensus.

The unemployment rate remained stable at 3.7%, close to a historic low.

Substantial downward revisions for hiring in previous months “dampen the overall figure somewhat,” said Ben Ayers, chief economist at NationWide.

But for Peter Cardillo of Spartan Capital, “the fact that we are seeing the increase in hourly wages rise from 4% annually to 4.1% is likely to exert upward pressure on the bond market.”

“This data today pushes back an anticipated cut in interest rates” by the Federal Reserve, assures the Spartan Capital analyst. The market until now was counting on a first rate cut in March.

For Mr. Cardillo, “bond yields will probably readjust accordingly and we could see new pressures on the stock market,” he explained.

After an initial downward nervous reaction before the opening, the markets settled slightly in the green. The dollar stabilized after a brief but sharp jump.

Because this report on employment “also strengthens the chances of a soft landing”, in an economy where inflation is falling under the effect of a tightening of monetary policy without however causing recession and unemployment.

In 2023, the job market in the United States will have slowed significantly, with the economy having created an average of 225,000 jobs per month, far from the unprecedented average of 399,000 per month observed in 2022.

On the eve of an election year, this remains the largest annual employment gain since 2015, outside of the pandemic disruptions of 2020 to 2022, noted Gregory Daco, an economist for Ernst and Young.

On the market, the major NASDAQ stocks returned to the green or stabilized after a bad week: Apple gained 0.05% after losing 1.27% the day before, following rating downgrades by analysts.

Around 10 a.m. ET, Meta was up 1%, Amazon was up 1.24%.

Within the Dow Jones, apart from the health insurance giant UnitedHealth which lost 1.24%, a majority of the 30 star stocks were largely in positive territory. Boeing gained 1.54%, Home Depot 1.40%, Caterpillar 1.35%.

The New York indices were, however, preparing to close the week with a loss, the first in nine weeks, after a strong end to 2023.

Shares of connected fitness device maker Peloton continued to enjoy great success with its idea of ​​partnering with TikTok to launch exercise video platforms. The stock soared by more than 15% to $7.11 after posting an increase of the same order the day before.

reference: www.lapresse.ca

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