US Stocks Drop After Mixed Jobs Report – Nasdaq off 1.1%
US Stock markets dropped off historic high levels on Friday after a mixed jobs report led to some profit-taking flow into the weekend. The Nasdaq took the biggest hit, losing 1.16% on the day, followed by the S&P which dropped 0.65%, and the Down which fell just 0.18%. The dollar had initially fallen further south in early trading before recovering after the data and it was a similar story for US treasury yields, which recovered to near flat having hit one-month lows earlier in the session, the 2-year closing at 4.486% and the 10-year settling at 4.090%. Oil prices dropped on demand concerns, Brent losing 1.1% to trade at $82.08 and WTI falling 1.2% to close at $78.02 per barrel. Gold continued its relentless march north, adding another 0.5% on the day to close around $2,170 per ounce.
Markets Poised Ahead of Key Inflation Data this Week.
US markets experienced a mixed day on Friday after a mixed jobs report gave a bit of something for everyone. The headline non-farm employment change came in much higher than expected, but revisions to the previous month’s number, lower average earnings, and a jump in the unemployment rate led to conflicting responses in markets. Investors reading through reports on Friday’s moves will see those numbers leading to anticipation of Fed rate cuts (Gold up), or Fed rate holds (Stocks down) depending on what story fits the narrative. In reality, we are going to need more consistent data as we move forward with most hoping for the glass-half-full thesis to continue with lower CPI and PPI prints later this week to spur the Fed into its first rate cut in June followed by at least two more this year.
Quiet Start to the Trading Week Ahead of Key Data
Traders are anticipating a relatively quiet start to the trading week with little on the event calendar scheduled to challenge momentum from Friday’s Wall Street action and an inflation update from China over the weekend. The Asian economic calendar is light today with the Japanese GDP data the only release of note and it is a similar pattern in the two later sessions with mainly 3rd tier data releases scheduled. UK markets will keep a close eye on the newswires when the MPC’s Catherine Mann speaks much later in the day, but most traders are expecting more rangebound conditions ahead of tomorrow’s key US CPI data release.
