Last Updated 4:10 PM EST
Stock indices finished today’s volatile trading session in the green. The Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100 gained 1.26%, 1.36%, and 1.56%, respectively.
The healthcare sector (XLV) was the session’s laggard, as it gained 0.63%. Conversely, the materials sector (XLB) was the session’s leader, with a gain of 3.5%.
Furthermore, the U.S. 10-Year Treasury yield increased to 4.175%, an increase of more than two basis points. On the other hand, the Two-Year Treasury yield decreased, as it hovers around 4.67%. This brings the spread between them to -49.5 basis points.
Compared to yesterday, the market is pricing in a higher chance of a lower Fed Funds rate for the end of the year. In fact, the market’s expectations for a rate in the range of 4.25% to 4.5% increased to 61.5%, which is up from yesterday’s expectations of 51.5%.
In addition, the market is now also assigning a 38.5% probability to a range of 4.5% to 4.75%. For reference, investors had assigned a 42.2% chance yesterday.
Stocks are Positive; Gasoline Prices Rise
Last Updated at 3:00PM EST
Stocks are in the green heading into the final hour of today’s trading session. As of 3:00 p.m. EST, the Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100 are up 0.6%, 0.7%, and 0.8%, respectively.
In addition, WTI crude oil is also up today as it hovers above $90 per barrel. Although the commodity is well off its yearly highs, its recent uptrend has led to prices at the pump gaining upward momentum across the country.
Indeed, the national average for regular gas was last $3.792 per gallon, up from yesterday’s reading of $3.778. Still, this remains significantly lower than the all-time high of $5.016 per gallon on June 14.
The highest prices can be found in California, where prices are substantially higher than the national average, at $5.475 per gallon. On the other hand, Georgia is the state with the lowest gas prices, at $3.13 per gallon.
It’ll be interesting to see if this upward trend will continue going forward as the Federal Reserve looks to raise interest rates to fight inflation while oil producers lower production in order to maintain the price.
Stock Rally Loses Steam in Volatile Session
Last Updated 12:15PM EST
Stocks are positive halfway into Friday’s volatile trading session although the major indices gave up most of their early gains. As of 12:15 p.m. EST, the Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100 are up 0.2%, 0.2%, and 0.3%, respectively.
Investors who may be on the lookout for a wage-price spiral may be relieved after the Bureau of Labor Statistics released its Average Hourly Earnings report, which measures the month-over-month change in wages.
A wage-price spiral is caused when the price of goods increases as a result of higher wages but also leads to workers demanding higher wages as a result of the higher prices. As a result, it creates a perpetual loop of price and wage increases.
A way investors can gauge the presence of a wage-price spiral is by comparing average hourly earnings to inflation. If earnings are higher than inflation, it could be a warning sign that the loop is beginning to form.
The good news is that wages grew 0.4% in October compared to the previous month, beating the forecast of 0.3%. The most recent consumer price index grew 0.4% month-over-month. When looking at the core consumer price index, the last reading was an increase of 0.6% month-over-month.
Although the most recent CPI numbers are from September, Economists’ forecasts for October’s inflation numbers paint a similar picture. Core CPI is expected to come in at 0.5%, which is higher than wage growth, while CPI is expected to be 0.7%.
Therefore, if economists are right then investors don’t need to worry about a wage-price spiral at the moment.
Stocks Rally as Nonfarm Payrolls Beat Expectations
Last Updated 10:00 AM EST
Equity markets are in the green 30 minutes into today’s trading session. As of 10:00 a.m. EST, the Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100 are up 1%, 1.1%, and 1.2%, respectively.
On Friday, the Bureau of Labor Statistics released its Nonfarm Payrolls report, which came in better than expected. This report measures the change in the number of individuals employed during the previous month but doesn’t include the farming industry. In October, job growth was 261,000 versus the forecast of 200,000.
The Bureau of Labor Statistics also released payroll data for manufacturing and private nonfarm jobs. Private nonfarm and manufacturing payrolls both beat expectations, coming in at 233,000 and 32,000, respectively.
However, the unemployment rate increased to 3.7% from 3.5%, which missed expectations of 3.6%. This comes as labor force participation ticked down slightly from 62.3% to 62.2%. This isn’t ideal, as it shows that fewer people are working as a percentage of the total working-age population.
Given that nonfarm payrolls beat expectations by a significant amount, it could signal to the Federal Reserve that it hasn’t tightened enough to stop inflation. This is especially true since the unemployment rate is still near all-time lows. As a result, it will use this data to justify higher rates if inflation continues to remain high.
Futures Up Ahead of October Jobs Data
First Published 7:11AM EST
U.S. stock futures moved up early Friday morning as traders look forward to the October jobs report which will be an important gauge of the tone of the Federal Reserve’s future meetings.
Futures on the Dow Jones Industrial Average (DJIA) gained 0.66%, while those on the S&P 500 (SPX) climbed 0.82%, as of 6.57 a.m. EST, Friday. Meanwhile, the Nasdaq 100 (NDX) futures advanced 0.84%.
The nonfarm payroll report will reveal how many jobs were added by employers in the U.S. in October, and also how the rate of unemployment moved. A deceleration in the number of jobs added will come as good news as it will slightly raise the chances of the Federal Reserve softening its stance. The aim of the central bank is to crush demand with higher borrowing rates, which will ultimately help stabilize prices.
A survey of economists conducted by Dow Jones shows that 205,000 jobs are expected to have been added in October, which would be the third consecutive month of deceleration. The unemployment rate is expected to have remained steady at 3.5%.
On the earnings front, several mixed earnings reports were released after the market closed on Thursday. Shares of software company Atlassian (NASDAQ:TEAM) plunged 23% in the extended hours after posting lackluster earnings and forward guidance. Carvana (NYSE:CVNA) dipped more than 9% on the back of wider-than-expected loss and revenue miss. Meanwhile, shares of Block (NYSE:SQ) popped 13% after posting positive surprises on earnings and revenues in Q3.
Among the most anticipated earnings on Friday is AMC Entertainment (NYSE:AMC), which is expected to report before the market opens.
The major averages ended Thursday in the red once again, with the S&P 500, the Dow, and the Nasdaq 100 dipping 1.06%, 0.46%, and 1.98%, respectively. The Fed’s fourth three-quarter-point hike and a hawkish tone on future hikes spooked investors, especially in the technology sector.
The indexes are on course to end the week with losses.
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