Market dynamics in the moment (futures):
S&P 500: -0.13%
Dow Jones: -0.08%
Brent oil: +0.12% ($85.98)
US Treasuries 10 years: +1.26% (3.532%/year).
U.S. stock index futures are trading in the red. On Friday the major indices finished the day flat with the S&P 500 down 0.12%, the Nasdaq down 0.18%, and the Dow Jones added 0.10%. Market participants were assessing the employment data for November. Asia’s stock market is trading mostly in green territory.
Nonfarm payrolls rose by 263,000 over the past month, while economists had forecast an increase of only 200,000. October data were also revised: over the month the number of employed people rose by 284,000 against an earlier estimate of 261,000.
At the end of November, unemployment remained at 3.7%, which matched expectations. Meanwhile, the rate of growth in average hourly earnings accelerated to 5.1% y/y after 4.9% y/y in October. Economists had expected the figure to fall to 4.6% y/y. Overall, the report indicates that the U.S. labor market is still resilient, and this may encourage the Fed to keep the pace of interest rate increases unchanged.
“Wage growth has been on an uptrend since August. We need to see a reversal of that trend for the Fed to be ready to pause. Until then, the central bank will delay implementing a policy turnaround,” said Brian Jacobsen, senior investment strategist at Allspring Global.
After the release of strong data from the labor market the main indices adjusted, but by the end of the session recovered most of the fall, and the Dow Jones even closed in the plus.
“If anything, it’s that investors have started to buy back the decline. It’s another sign that the market is expecting at least a seasonal December rally,” said Sam Stovall, chief investment strategist at CFRA