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Main U.S. indexes jump >1%: Nasdaq out front
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Energy leads gainers; cons services sole decliner
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Euro STOXX 600 index up ~0.7%
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Dollar, bitcoin rise; gold down ~2%; crude up >4%
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U.S. 10-Year Treasury yield jumps to ~3.44%
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WALL STREET A BIT GIDDY AFTER APRIL JOBS REPORT (1005 ET/1405 GMT) Wall Street is in rally mood on Friday after a hot labor market report for April suggested the Federal Reserve may be able to deliver a soft landing as it keeps interest rates steady to cool stubbornly high inflation. Ten of the 11 S&P 500 sectors are higher, led by energy , while communication services is the sole decliner.
Banking shares are among outperformers, with semiconductors , transports and small caps also higher. U.S. employers boosted hiring in April while raising wages for workers, pointing to sustained labor market strength. Nonfarm payrolls increased by 253,000 jobs, while the Labor Department revised March data lower to show 165,000 jobs added instead of 236,000 as previously reported. Economists polled by Reuters had forecast payrolls rising by 180,000 in April. Gina Bolvin, president of Bolvin Wealth management Group in Boston, said it looks like good news may be good news.
"In the past we've seen a hot jobs report bring the market lower but now the market is holding on to gains, thinking the glass is half full, a soft landing is possible and a recession is not as imminent." The market's interpretation of where Fed policy will be at the end of the year does not square with the numbers that we're getting or what the Fed has been telling us, said Anthony Saglimbene, chief market strategist at Ameriprise Financial. "There could be some volatility later this year in the stock market. The reality is the Fed is likely going to keep rates higher for longer," he said. "The market just doesn't see that right now or just doesn't want to admit that might be the case later this year." Below is a snapshot of early market prices:
(Herbert Lash)
*****
U.S. STOCK FUTURES HOLD GAINS AFTER HOT APRIL JOBS DATA
(0900 EDT/1300 GMT)
U.S. equity index futures are holding their gains in the
wake of the release of the latest data on U.S. employment.
The April non-farm payroll headline jobs number came in at
253k, which was well above the 180k estimate. The unemployment
rate was 3.4% vs a 3.6% estimate. Wage data, on a
month-over-month and year-over-year basis, was hotter than
expected:
Of note, however, the March headline jobs number was revised sharply lower from 236k to 165k. According to the CME's FedWatch Tool , the probability that the Fed sits on its hands and leaves rates unchanged at its June meeting is now around 97% from 99% just prior to the data coming out. The chance of a 25 point rate hike is now 3% from 0% just before the numbers were released.
E-mini S&P 500 futures are higher, gaining around 0.7%. In the wake of Apple's upbeat results, the futures were up around 0.7% just before the numbers came out.
All S&P 500 sector SPDR ETFs are higher in premarket trade, with energy , up around 2%, showing the biggest gain. The SPDR S&P regional banking ETF is up around 4%. Regarding the jobs data, Anthony Saglimbene, chief market strategist at Ameriprise Financial, said: “It's definitely telling you that the job market is still hot. It’s a little bit concerning that the inflation number, the average hourly wages, that ticked up." He added, "to me it communicates two things. The Fed still has some work to do and the job market’s hot. So the 25 basis points that they raised this week was justified. It also tells me that maybe the Fed is right in terms of they can cool some of the inflation pressures in other areas of the economy, knowing that it's not going to have a real big detrimental impact on the labor force.” Additionally, Saglimbene said “The market is excited that maybe the Fed is done raising interest rates and that they're actually going to cut later this year, while at the same time the Fed is telling you that that's not really what their position is. And we have these job numbers that are showing that there's still some work to do." Here is a premarket snapshot just shortly before 0900 EDT:
(Terence Gabriel, Herbert Lash)
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FOR FRIDAY'S LIVE MARKETS POSTS PRIOR TO 0900 EDT/1300 GMT - CLICK HERE
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(Terence Gabriel is a Reuters market analyst. The views
expressed are his own)
