After a bumpy week Wall Street closed with a mini rally on Friday, although it was inspired, in part, by some less-than-stellar economic news.
S&P 500: +0.7%Dow: +0.5%Nasdaq: +1.2%
US non-farm payrolls gained a much weaker than expected 29,000 jobs in September. Market observers had pencilled in a gain of 90,000.
Compounding September’s labour market softness was a severe downward revision of jobs growth over the previous two months before that.
The weaker-than-anticipated data pulled down expectations for a rate hike of at least 25 basis points from the Fed at its meeting at the end of October to around 23 from 64% a week earlier.
“Today’s news was OK insofar as it means the economy isn’t roaring,” SummitTX Capital head of trading Robert Bernstone told Reuters.
“But how good is that? Yes, it’s fine insofar as it takes the short-term rate hike off, but there is a concern over the economy, there is a concern over inflation, so cautious optimism is kind of where people are.”
“But with that said, a potential squeeze into the end of the year, or at least for the next month or two, could happen just because it’s a hated rally.”
US tech rally
Tempered expectations for an impending rate hike helped boost rate-sensitive stocks such as the S&P 500 real estate index, which gained 0.4%, and the small-cap Russell 2000 index, which gained 0.9% to register its biggest daily gain in a month.
Mega-cap stocks helped lead the advance, with Nvidia up 1.3% and Tesla gaining 4.7% to put them among the biggest boosts to the S&P 500.
Despite Friday’s gains, both the Dow and S&P 500 recorded a fourth weekly decline in the past five, but the Nasdaq secured a weekly gain, its fifth in the last six.
For the week, the S&P 500 shed 0.3%, the Nasdaq rose 0.5%, and the Dow fell 1.3%.
ASX to open higher
It might not feel like it, but the ASX 200 still managed to gain 0.2% over the week despite Thursday’s 2% stumble.
Futures trading points to the ASX 200 gaining 0.3% this morning.
US Treasury yields continued to edge higher despite the poor job numbers.
The yield on benchmark US 10-year note rose 2.8 basis points to 5.26%.
The 30-year bond yield rose 1.76 basis points to 5.62%, and the 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, rose 3.14 basis points to 4.81%.
Despite the Greenback’s rise, the Aussie dollar made gains against it, up 0.3% to 69.53 US cents.
The global oil benchmark Brent crude future was pretty flat, still holding above $US100/barrel. The US benchmark WTI crude futures fell 2%.
Gold lost ground on the session (-0.9% to $US4,142/ounce) and over the week on the back of a stronger US dollar.
Copper slipped on a soft turnover but is still around 16% higher over the past 6 months.