- US stocks rose on Friday as markets digested a strong jobs report that signaled resilience in the economy.
- Bond yields jumped following the data as it suggested Fed rate cuts may not come soon.
US stocks rose on Friday as markets digested a strong jobs report that tested convictions of imminent rate cuts from the Federal Reserve.
The November data showed 199,000 jobs were added to the US economy, compared to 150,000 in October, while unemployment slipped to 3.7% from 3.9% the month before. Following the release, bond yields jumped, with the yield on the 10-year Treasury clocking in at 4.23%.
While the resilient labor market points to economic strength, calming recession fears, it does suggest that markets may have overestimated how soon the Fed may cut rates.
"The Fed has been stymied by better than expected data releases but as long as inflation continues to edge lower the Fed will likely remain on hold," Quincy Krosby from LPL Financial said. "But if today's report is a harbinger of continued consumer spending the Fed may have to issue a considerably more hawkish message and telegraph that they still cannot declare victory on their campaign to quell inflation."
Meanwhile, JPMorgan's chief US economist thinks that the strong jobs data is not a sign of a protracted fight against inflationary pressures.
"We're seeing, generally speaking cooling in wage pressures," Michael Feroli said in a Global Data Pod podcast episode on Friday. "So one might be concerned that this still resilience in the labor market is creating a problem for inflation, but actually it's occurring against a backdrop in which wage growth is moderating to a more sustainable level."
Here's where US indexes stood as the market closed at 4:00 p.m. on Friday:
- S&P 500: 4,604.37, up 0.41%
- Dow Jones Industrial Average: 36,247.87, up 0.36% (130.49 points)
- Nasdaq Composite: 14,403.97, up 0.45%
Here's what else is going on:
- OPEC and Saudi Arabia are losing their grip on the oil market as prices see the longest fall in five years.
- A new study shows that a stock-only strategy offers better returns than a 60/40 mix over the long-term.
- An "extremely rare" stock market signal with a 100% accuracy rate is flashing and points to record highs in 2024.
- Fundstrat's Tom Lee said that stocks are taking off on a "liquidity rally" and will rocket to new highs next year.
In commodities, bonds, and crypto:
- Oil prices rose with West Texas Intermediate up 2.65% to $71.18 a barrel. Brent crude, the international benchmark, moved up +2.39% to $75.82 a barrel.
- Gold slipped by 1.35% to $2,018.08 per ounce.
- The 10-year Treasury yield surged more than 10 basis points to 4.23%.
- Bitcoin gained 2.06% to $44,135.50.