Despite an inconclusive jobs report that contributed to volatile trading earlier in the session, stocks ended Friday with modest gains. The advance allows the main US equity average to break a four-session losing streak, fueled by the Federal Reserve’s rejection earlier this week to make a definitive turnaround from his extremely hawkish stance.
Nasdaq Composite (COMP.IND) complete + 1.3%S&P 500 (SP500) finished + 1.4% and the Dow (DJI) close + 1.3%.
Results were higher after four consecutive days of reduction. The last two occurred after the Fed raised interest rates by 75 basis points. Meanwhile, the central bank offers little protection to a consistently hawkish outlook.
Alex King of Cestrian Capital told Seeking Alpha: “If you go to work early in the morning and come back late at night, you will conclude that the market just rallied over the weekend. “However, if you sit in front of a brokerage screen all day, you’ll conclude, ‘yes another crazy day in the neighborhood.”
King noted that a reassuring tweet from a well-connected Fed reporter helped the market dismiss a jobs report that many might consider too indicative of a strong labor market for growth. comfort of Wall Street. Meanwhile, King also argued that some of the earnings-related slides created a source of cash for bargain hunting elsewhere on Friday, combined with some organizational interest in the space. risky cryptocurrency.
“High beta software names were hit by a couple of poor earnings reports yesterday and the sector then provided capital for investors chasing the major indexes up late in the day before closing. door,” King argued. “Cryptocurrencies … have been on fire all day – further in our view that Bitcoin and Ether are being institutionally accumulated.”
The biggest headline of the day came from the government’s monthly jobs report. Data pointed to 261 thousand new jobs added for October, above the 210K that economists had expected. Meanwhile, the figure shows an increase in hourly wages.
These bullish numbers were slightly offset by a higher-than-expected rise in the unemployment rate, to 3.7%. This is up from 3.5% last month and above the 3.6% expected by economists.
Diving into the report, investors are generally looking for signs of slack in the jobs report, as a softening labor market should remove key inflationary pressures and perhaps point to an early pivot. than from the Fed.
The latest data have given a mixed reading on this front. A higher unemployment rate may indicate easing labor conditions. Still, steady job growth and low wages point to the continued resilience of this vital part of the economy.
“The jobs report was good, but it was the smallest job gain in years, so that’s good. Unemployment is high. Not enough for the Fed to say ‘okay, we’ll pause’ but it’s enough to get things moving in the right direction,” Thomas Hayes, president of investment management firm Great Hill Capital, told Seeking Alpha.
Among the individual stocks, DraftKings and Twilio both crashed after their respective quarterly reports. Meanwhile, Starbucks recovers after its own financials show Sales growth compares better than expected.
