On Friday, the stock markets witnessed a remarkable turnaround, the most significant since March. The $DJIA(.DJI)$ rose by 0.9% during the day, reversing an initial 0.8% decline. The $S&P 500(.SPX)$ and $NASDAQ(.IXIC)$ also recorded gains. This turnaround was triggered by a stronger-than-expected U.S. jobs report.
Gainers
$POINT BIOPHARMA GLOBAL INC(PNT)$ (+86%): The American biotech specializing in cancer treatments has received a takeover offer from Eli Lilly, offering $12.50 per share in cash, valuing the company at $1.4 billion.
Losers
$Airbnb, Inc.(ABNB)$ (-9%): The travel rebound seems to be on its last legs, as the pent-up demand caused by the pandemic fades
Main Events
The week was marked by several significant developments in the markets:
- The U.S. jobs report was the standout event of the week, with the creation of 336,000 jobs in September, more than double expectations.
NFP
- Despite strong job growth, the data showed a notable cooling in wage growth, easing concerns about rapid inflation.
- Bond yields rose earlier in the week due to the strength of the U.S. job market.
US Bond yields
- Favorable macroeconomic indicators supported expectations of a more lenient monetary policy.
- However, the week ended with a degree of risk aversion in response to the monthly U.S. employment figures, which were deemed too strong to support a more accommodative monetary policy.
Market scenario
The current scenario is characterized by a robust U.S. economy, as evidenced by strong job creation and a stable unemployment rate. However, markets remain sensitive to interest rate developments, and the rise in bond yields has raised concerns about a stricter monetary policy.
The probability of a pause in monetary policy in November has slightly decreased, although the majority of investors still anticipate it at 71%. Investors are hoping that next quarter's corporate earnings results may influence central bank decisions toward lower interest rates.
The upcoming week is poised to be pivotal for both corporate earnings and economic data. Major companies, including LVMH and $Pepsi(PEP)$ , are set to unveil their third-quarter results. These reports hold significant importance given the current climate of uncertainty, with close attention on the outlook provided by these companies for the year-end.
Furthermore, the minutes from the latest Federal Reserve meeting will be disclosed on Wednesday, offering valuable insights into the central bank's deliberations and its future monetary policy decisions.
Overall, the upcoming week appears to be packed with events that could significantly impact financial markets. Investors will be closely monitoring corporate earnings and economic indicators amid heightened uncertainty.
In summary, markets are influenced by the delicate balance between a strong economy and concerns about monetary policy, with a focus on upcoming inflation data and central bank decisions. Investors are looking ahead to anticipate how these factors will impact the markets in the coming weeks.
SPX Levels
Key levels: 4200-4300-4400
Upper area : 4300-4350-4400
Lower area: 4250-4200
SPX Levels
Agenda
In the United States, producer prices will be announced on Wednesday, followed by consumer prices on Thursday. Friday, the University of Michigan's confidence index .
China is expected to release data on foreign trade and inflation towards the end of the week.
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Comments
The strong jobs report is a sign that the US economy is still growing, even in the face of rising inflation and interest rates.
The jobs report sparked a frenzy in the stock market, as investors rushed to buy stocks on the news.
The economy is still facing a number of challenges, such as high inflation and rising interest rates.