Heard on the Street Recap: Labour Day -- WSJ

By Heard Editors

Friday's jobs report showed signs of a slightly cooling labor market. The U.S. added 206,000 jobs last month, edging expectations. But the unemployment rate rose slightly to 4.1% and average hourly earnings were up 3.9% from a year earlier, the smallest gain since 2021.

The report didn't drastically change investors' views on interest rate cuts: Traders now think there's a 74% chance the Fed will cut rates at least twice by the end of the year, up from 70% on Wednesday.

The 10-year Treasury yield edged down 0.074 percentage point to 4.272%. Equities rallied, with the tech-heavy (and therefore interest-rate sensitive) Nasdaq Composite gaining 0.9% and the S&P 500 increasing 0.5%. The Dow Jones Industrial Average ended the day up 0.2%, or 68 points. All three indexes were up for the week.

Over in the U.K., stocks rose after the center-left Labour Party won in a landslide, placing the party in power for the first time in 14 years. The domestically focused FTSE 250 index rose 0.9% and U.K. government bond yields fell. Heard's Jon Sindreu warns against premature optimism, noting that while the new prime minister won on a middle-of-the-road policy platform, the reality of U.K.'s economic and fiscal situation could force him to make bolder decisions once in office.

Macy's shares jumped 9.5% after The Wall Street Journal reported late Wednesday that Arkhouse Management and Brigade Capital raised their offer price for the department store chain to $24.80 a share, up slightly from the last offer of $24. Friday's gain still leaves the company's shares about a fifth cheaper than the latest offer price, reflecting skepticism that the deal will materialize. Deal or no deal, one silver lining for Macy's investors is that whatever Arkhouse and Brigade Capital saw in their due diligence was good enough to raise the bid, even if it was by a small margin.

This analysis comes from the Journal's Heard on the Street team. Subscribe to their free daily afternoon newsletter here_._

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(END) Dow Jones Newswires

July 05, 2024 17:30 ET (21:30 GMT)

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