Tech stocks rallied on Friday, led by a turnaround in AI-related names following Thursday’s sharp sell-off, although the sector still has some way to go to recover recent losses. The rebound was accompanied by a stellar US jobs report, which saw the US economy add 165k jobs in October, well above the 65k forecast, while the prior two months were revised higher by a net 84k. The Unemployment rate also declined to 4.14% from 4.2%, despite an uptick in participation, while wage growth exceeded expectations. The report reinforced the resilience of the labour market and gave the Fed greater room to focus on inflation, with money markets now pricing in a 77% probability of a December hike, up from 64% earlier in the session. Treasury yields rose across the curve, particularly at the front end, resulting in a bear flattening as the strong jobs report and rebound in equities saw some of the recent flight-to-quality demand unwind. Fed commentary also leaned hawkish, with Daly stating that policy needs to be tightened further, although the timing and magnitude remain data-dependent. In FX, the Dollar rallied on the tech rebound and strong jobs report, with the former easing concerns over the growth outlook and the latter supporting expectations for further Fed tightening. Antipodeans and the Canadian Dollar lagged, while the Japanese Yen and Swiss Franc fared relatively better against the Dollar. The Loonie was hampered by another weak jobs report. Crude prices eked out modest gains but remained substantially lower on the week amid hopes of a shorter US/Iran war following the Democratic sweep in the midterms. Reports suggested Iran was responding positively to mediation efforts, although Tehran continued to demand concrete action from Washington. Looking ahead, attention turns to Tuesday’s US CPI report, which will be crucial for December Fed pricing following Friday’s robust labour market data. The US jobs report was very strong, with headline payrolls jumping to 165k from an upwardly revised 60k, well above the expected 65k. The Unemployment rate dipped to 4.1% from 4.2% (exp. 4.2%), while the participation rate rose to 61.9% (prev. & exp. 61.8%). Wages were also hotter than expected, with average hourly earnings rising 0.4% M/M (exp. & prev. 0.3%), while the Y/Y rate eased to 3.1% from 3.2%, but remained noticeably above the 2.9% consensus. Looking at the breakdown, private payrolls rose 159k (exp. 64k, prev. 78k), while manufacturing added 19k (exp. 5k, prev. 13k). All in all, the report gives the Fed further room to hike. With policymakers already focused on the inflation side of their mandate, the data reinforce the picture of a resilient labour market, easing immediate concerns about employment weakness. Money markets now price a 77% chance of a 25 basis point hike in December, up from 64% earlier on Friday. Pantheon Macroeconomics retains its forecast for a 25bps rate hike in December, reflecting the likely near-term increase in inflation as higher energy costs feed through to core goods prices. However, Pantheon sees a prolonged tightening cycle as unnecessary given tighter financial conditions and a potentially growing drag from AI. It expects no further Fed tightening next year, followed by 75bps of easing by the end of 2027. Elsewhere, both Oil and Gold closed higher on Friday by 0.3% and 0.8% respectively.
To mark my 3475th issue of TraderNoble Daily Commentary I am offering a special 2-Year Rate of Euro 2750 for my Platinum Service which includes 1 to 4 updated emails throughout the trading day to demonstrate this value, a monthly subscription over the same period would cost 4440 euro in total This offer represents a 38% discount and is open to both new and existing members. If anyone is interested in this offer can you please email me on bryan@tradernoble.com for details
For anyone following my Platinum Service it lost 2170 points on Friday and is now ahead by 374 points for November, after closing October with a gain of 3975 points after ending September with a nice gain of 7767 points, after ending the month of August with a gain of 2645 points after closing July with a gain of 8031 points, after ending June with a new record of 10527 points after ending May with a loss of 1104 points, having ended April with a gain of 1730 points, after ending March with a massive gain of 9002 points, having closed February with a strong gain of 5482 points after ending January with a gain of 4757 points, having closed December with a gain of 2599 points, after ending the month of November with a gain of 4542 points, after ending October with a nice gain of 5110 points after closing September with a gain of 3774 points while ending August with a gain of 3362 points after closing July with a gain of 3753 points after closing June with a gain of 3530 points, having closed May with a gain of 3606 points, after closing April with a gain of 7685 points after closing March with a gain of 2254 points while closing February with a gain of 4180 points. January ended with a gain of 2768 points while 1997 points were gained in December. October ended with a gain of 2179 points, after closing September with a gain of 4402 points, following a loss of 301 points in August. July gained 1908 points while June saw a gain of 2074 points. The Platinum Service made a previous record 9619 points in October 2022. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 2300 points. I have a YouTube Channel which contains recent interviews I have given This can be viewed by clicking HERE Please subscribe to this for new interview notification
Recent Comments