[ad_1]
- The US economy created 75,000 new jobs in May, well below the 185,000 created by economists
- The weakening of economic data justifies the argument for a reduction in interest rates as early as this summer
- Main benchmarks for the best week since November
US stocks rebounded on Friday, following a weaker-than-expected jobs report, which argues in favor of an interest rate allegation by the Federal Reserve in the near future , while the United States feared that the US economy would slow down, while trade tensions between the United States and Mexico China persists.
How did the benchmarks behave?
The Dow Jones Industrial Average
DJIA, + 1.13%
increased by 271 points, or by 1.1%, to 25,997, while those of the S & P 500
SPX, + 1.22%
earned 33 points, or 1.2%, at 2876, and the Nasdaq Composite Index
COMP + 1.76%
rose 119 points to 7,734, a gain of 1.6%.
On Thursday, the Dow Jones index rose 181.10 points, or 0.7%, to 25,720.66, representing its longest run of gains since March 18, according to Dow Jones Market Data. The S & P rose 17.34 points, or 0.6% to 2,843.49, while Nasdaq added 40.08 points, or 0.5%, to 7,615.55. .
For the week, the Dow is expected to gain 4.8%, the S & P 500 index is expected to post a 4.6% yield, while the Nasdaq is expected to show a weekly rise of 3.8%. If these levels hold up, this would be the best performance since the week ended Nov. 30, according to FactSet data.
What motivates the market?
The US economy created 75,000 new jobs in May, while the unemployment rate remained stable at 3.6%, the Labor Department said Friday, lower than the 185,000 estimated by economists, according to a MarketWatch poll . The estimated employment gains for March and April have been revised downward by a total of 75,000, and the three – month moving average of monthly employment gains has gone from 245,000 in January to 151,000 today.
The jobs report follows the weakest increase in private sector employment in nine years, according to ADP, a payment processor, which revealed Wednesday that the private sector had created 27,000 jobs non-farm in May, the lowest growth since March 2010.
While stock index futures were initially sold on the news, markets could enter a period during which bad economic news is good for the stock markets, analysts said, which would increase the chances Federal government returns to lower interest rates. coming months.
Wall Street is increasingly expecting a reduction in the Federal Reserve's borrowing costs to combat sluggish inflation and the repercussions of the intensification of trade wars between the United States and its counterparts, particularly the United States. Mexico and China. According to data from the CME group, the market has a 25% chance of a rate cut at the next Fed meeting on policy definition.
On the trade front, several reports suggested to the United States and Mexico to have made progress Thursday on an agreement that would allow Mexico to accept measures to slow the flow of migrants from Central America to the United States, in exchange for the US refusal to impose tariffs on Mexicans. imports.
Mexico also emphasized the need to strengthen economic assistance provided by the United States to eventually subsidize Mexico's interdiction efforts and support economic development in the countries of origin of migrants. It remains to be seen, however, whether an agreement can be reached in time to avoid the imposition of a 5% tariff on all Mexican imports, which is expected to come into effect on Monday. Discussions should resume on Friday.
There is less reason to believe that the trade dispute between the United States and China will be settled as soon as possible, without further negotiations scheduled between the two powers. On Friday morning, the governor of the People's Bank of China told Bloomberg that the central bank had "a lot" leeway to use monetary policy to stimulate the Chinese economy if Chinese trade American had to aggravate it.
What other data is coming?
Wholesale stocks rose 0.8%, the Commerce Department said Friday, ahead of consensus expectations of 0.3%, according to Econoday.
A report on the growth of consumer credit will be published at 3 pm
What do analysts say?
"This is the type of [jobs report] the doves will really take it, because they support the argument for a rate reduction beyond political or commercial issues, which was not part of the Fed's original mandate, "wrote Mike Loewengart, vice president of investment strategy at E-Trade. .
"That being said, our historically low unemployment rate has not moved and, even though this figure has remained low, we continue to create jobs, which confirms the assumption that the economy is growing. is still developing, "he added. "So, the Fed will have to follow a very thin line."
"The stock indexes were about to realize weekly gains, as forecasts that the US Federal Reserve and other central banks around the world are lowering interest rates to counter the damaging effects of rising prices. Growing business has quieted sentiment, "said Raffi Boyadjian, XM's investment analyst. . "Traders also hoped that US and Mexican authorities would be able to solve the problem of illegal migration across the border between the two countries."
What stocks are under discussion?
Barnes & Noble Inc.
BKS + 12.08%
actions could be under discussion on Friday after The bookseller has confirmed the acquisition of the hedge fund Elliot Management Corp., at a price of $ 6.50 per share, in a transaction valued at $ 683 million, including the assumption of debts. The stock rose 10.8% Friday.
Actions of Zoom Video Communications Inc.
ZM, + 21.07%
rose 21.7% Friday morning, after the company announced results higher than expected Thursday night.
How are other markets traded?
10-year Treasury Bill yield
TMUBMUSD10Y, -2.08%
fell by almost 0.03 point to 2.088%.
Asian equities closed higher on Friday, with Japan's Nikkei 225 up 0.5% and Kopsi in South Korea up 0.2%. Markets in China have been closed for holidays. In Europe, equities were up, with the Stoxx Europe 600
SXXP, + 0.93%
adding 0.8%.
Crude oil
CLN19, + 2.30%
was on the rise for the second consecutive session, while the price of gold
GCN19, + 0.37%
slightly higher. The US dollar
DXY, -0.53%
meanwhile, falling 0.4% compared to its competitors.
[ad_2]
Source link