Stocks Drive Higher After Jobs Data – Nasdaq up 1.25%
US stock markets jumped higher again on Friday and gold surged after US payrolls rose 303K versus estimate 214K. The Dow Jones Index closed up 0.8%, the S&P 500 rose 1.11% and the Nasdaq jumped 1.2% higher. The benchmark 10-year treasury yield added nine basis points to close at 4.40%. The dollar index rose enough to arrest a three-day slide with main gains seen against JPY, AUD, and Cad which fell after the nation’s economy unexpectedly lost jobs. Brent oil held above $90 per barrel amid geopolitical tensions and WTI finished just under the $87 per barrel mark. Gold surged higher yet again to hit another record, rising 1.7% on the day to close at $2329.75 per ounce.
Traders Now Looking at September for Fed Move
Traders are now pushing out pricing for a full 25 basis point Fed rate cut to September from July. While the jobs data on its own is not enough to delay policy easing, Friday’s employment report when taken with the pickup in key inflation numbers at the start of 2024, raises the possibility of later or fewer cuts this year.
Perhaps that’s why the CBOE Volatility Index, (known as the VIX), dipped on Friday as US stocks climbed but still managed to post its best weekly gain since September. CPI data out later this week will be key for many investors, and more sticky numbers out of the US could see a different story for the major US indices as those Fed expectations move out further.
Slow Start to a Big Week for Traders
There is a slow start to the trading week today as far as the economic calendar is concerned. In the Asian time zone, Australia has home loan data and foreign reserves numbers due out, but these are not usually market-moving releases and the same can be said for Japan’s wage and earnings data due for release later in the session. German industrial production and trade balance headline European releases once the London session commences and there is little on the event calendar in the New York session today. However, it is very much the calm before the storm today, with key central bank rate calls and some big tier 1 numbers due out later in the week.
