[ad_1]
Hold steady. The three major US stock indices closed higher on Friday. Investors were relieved by the news that the economy would have created more jobs than expected in March. The employment report should calm, at least for now, fears of a recession.
Break
stock (symbol: SNAP) surged after the company unveiled new initiatives likely to enhance the engagement of users of the social media company. Dow (
DOW
) – A recent fallout – saw its shares plummet after JP Morgan analyst Jeffrey Zekauskas initiated cover with an underweight index. Today After the bell, we …
More help wanted
US stocks continued to rise on Friday as the S & P 500 and the Dow Jones Industrial Average were down only 1.3% and 1.2% respectively lower than their historical highs.
the
Dow Jones Industrial Average
rose 40.36 points, or 0.15%, to close at 26,424.99. the
S & P 500
increased by 13.35 points, or 0.46%, to end at 2892.74, and the
Nasdaq Composite
added 46.91 points, or 0.59%, to close at 7938.69.
The March employment report on Friday morning put investors at ease. Non-farm payrolls increased by 196,000 workers last month, about 20,000 more than expected, and represent a sharp turnaround from the 33,000 in February after a slight upward revision. The number of March marked 102 consecutive months of positive job gains.
The unemployment rate remained unchanged at 3.8%, the lowest in two decades. The activity rate of the labor force declined slightly to 63%, but remained close to recent highs. Average hourly earnings increased 3.2% year-over-year, slowing slightly and controlling inflationary pressure.
The growth in average hourly earnings over 12 months has historically reached 4% before threatening economic output with higher labor costs, writes Search LPL strategist John Lynch Friday. The current rate of wage growth remains moderate, writes Lynch, and should give the Federal Reserve enough leeway to continue its wait-and-see attitude for a while.
"Today's strong employment report should reassure investors," wrote Andrew Chamberlain, chief economist of the employers' review site Glass door. "Faced with many economic difficulties, including the worst month of December for stock markets since the Great Depression, the longest closure of the government in January, growing trade tensions with China, forecasts GDP growth below 2019, fiscal stimulus down, and recent reversal of the yield curve – analysts are looking for signs of a more pronounced slowdown in hiring. Today's strong report shows few signs of weakness, "he wrote.
Nevertheless, President Donald Trump has called on the Federal Reserve to launch quantitative easing by lowering interest rates and buying assets to stimulate growth. BTIGof the Julian Emanuel is with him.
The Fed seems to have fulfilled its double mandate of maximum employment and stable prices for the moment, but that does not mean that there is nothing to fear. Emanuel noted that recessions tend to begin soon after the unemployment rate has hit a cyclical low and that US 10-year yields have declined too much due to lower inflation expectations. He believes that rate cuts can be an effective way for the Fed to promote inflation, raise long-term rates and avoid a recession during a soft landing.
"Tightening financial conditions enough so that economic activity does not" overheat "until the pace of this expansion is not severely damaged is also not a very complicated case of surgical precision," writes Emanuel. This did not happen in 2000, nor in 2007, but was successfully implemented in the aftermath of the 1994-95 rate hike cycle, according to Emanuel.
The Fed began lowering rates in July 1995-155 days after the end of the rate hike cycle in February of this year, in response to an economic slowdown. The situation today is very similar. Emanuel expects a reduction of 25 basis points in September and December. If further cuts are needed, they will have to be completed by June 2020 to avoid politicization before the November 2020 elections, wrote Emanuel.
The hot stock
Apache
(APA) climbed to the top of the S & P 500 on Friday, thanks to rising oil prices.
The Apache stock rose $ 2.20, or 6.6%, to $ 35.57.
Oil rebounded Friday, crossing the $ 70 a barrel mark for the first time since November. And Apache was not the only stock to benefit:
EOG Resources
(EOG),
Anadarko Petroleum
(APC),
Hess
(HE IS),
Devon Energy
(DVN),
Marathon Petroleum
(MPC), and
Cimarex Energy
(XEC) were also among the top 10 performers in the index today.
In the last 12 months, Apache shares decreased by 8.2%.
The biggest loser
Dow's stock price dropped at the bottom of the index, as a result of the DowDuPont split into three companies.
Dow's shares lost $ 2.47, or 4.1%, to $ 57.24.
Although the fallout has been going on for a long time and is drawing many fans into the street, Dow has been hit with a downward call today, saying the dividend of the stock should be higher.
–Teresa Rivas
Write to Evie Liu at [email protected]
[ad_2]
Source link