U.S. stocks soared after a much better-than-expected employment report for November from the Labor Department which saw the economy create 266,000 new jobs, the most since January, and the unemployment rote fell to 3.5%, a 50 year low.
However, progress toward a partial U.S. – China trade deal remains a point of focus for market participants also as a deadline that will see import duties increased on Dec. 15 looms.
How are major benchmarks performing?
Late morning the Dow Jones Industrial Average DJIA, +1.14% was up 312 points, or 1.1%, at 27,991 while the S&P index SPX, +0.97% gained 29 points, or 1.0%, to 3,146, and Nasdaq was up COMP, +0.95% were up 81 points at 8,651, a rise of 1.0% also.
On Thursday, the Dow DJIA, +1.14% closed up 28.01 points, 0.1%, at 27,677.79 after trading in the red most of the day. The S&P 500 SPX, +0.97% was up 4.67 points, or 0.15%, at 3,117.43 and the Nasdaq Composite Index COMP, +0.95% closed 4.03 points higher, or 0.05%, at 8,570.70.
What’s driving the market?
The U.S. economy created 266,000 new jobs in November, the Labor Department reported, the biggest gain since January, signaling the labor market remains robust even though economic growth has slowed. The government also revised the increase in new jobs in October to 156,000 from 128,000. September’s gain was raised to 193,000 from 180,000.
The increase in new jobs easily topped the 180,000 MarketWatch forecast, helped by the end of the General Motors GM, +0.95% auto-workers strike which added roughly 50,000 jobs to the payrolls number.
The unemployment rate slipped to 3.5% from 3.6% and matched a 50-year low. The average wage paid to American workers rose 7 cents, or 0.2%, to $28.29 an hour. The 12-month rate of hourly wage gains slipped to 3.1% from 3.2%.
The strength of the employment report was seen justifying Federal Reserve Chairman Jerome Powell’s policy of leaving interest rates on hold, analysts said.
Read: Fed is ‘super-glued’ to its seat until after the election, economists say after stellar jobs report
“Today’s jobs report should have the Fed feeling good about the current stance of policy of remaining on hold at 1.50-1.75%,” Bank of America Merrill Lynch economist Michelle Mayer said. “Moreover, the strong employment activity suggests that the economy is in a better spot than previously thought to withstand any potential drag from the US-China trade war and other geopolitical risks in the outlook.”
In other U.S. economic data, the University of Michigan’s December consumer sentiment indicator rose to 99.2 from 96.8 in the prior month.
Meanwhile, U.S.-China trade talks also remain in the spotlight ahead of the Dec. 15 deadline for $156 billion in new tariffs on consumer goods to take effect.
China’s State Council on Friday began the process of exempting some soybeans and pork imported from the U.S. from import tariffs, the state-run Xinhua News Agency said, a move taken as a sign of progress on at least a partial trade pact. The Wall Street Journal reported earlier in the week that the value of the farm goods China will buy from the U.S. is still an issue, as trade representatives in China are still pushing for a phaseout of earlier tariffs.
The U.S. and China are in an “intense” phase of trade talks, but a deal is “in fact close”, though President Trump was prepared to walk away if he did not get the terms wanted, White House National Economic Council director, Larry Kudlow told CNBC on Friday morning.
Stocks To Watch
Financial stocks got a big lift Friday, as the much stronger-than-expected November jobs data pushed up bond yields. The SPDR Financial Select Sector ETF XLF, +1.44% rallied 1.3%. Bank of America BAC, +2.02% increased to 2.0%, Citigroup C, +1.73% rose 1.7%, and J.P. Morgan JPM, +1.86% was up 1.7%.
Uber Technologies UBER, -2.50% was off 2.0% after it said it received more than 3,000 reports of sexual assault in the U.S. last year, down 16% from a year earlier.
American Outdoor Brands AOBC, -0.79% rose 1.0% after beating forecasts The Smith & Wesson parent’s revenue was also above estimates and the company raised full-year outlook as gun demand stabilizes.
CrowdStrike CRWD, -1.27% slipped after topping Wall Street estimates with quarterly results and the cybersecurity company’s stock turned around after a typo in its outlook was corrected.
Ford F, +0.73% recalled 262,000 pickup trucks with defective tailgate latches but the stock was up 0.6%.
How are other markets faring?
The yield on the 10-year U.S. Treasury note TMUBMUSD10Y, +1.30% rose 5 basis points to 1.85%, after the much stronger than expected U.S. employment report.
Oil futures climbed on Friday, with prices on track to post a hefty weekly gain, after OPEC and its allies agreed to officially cut production by 500,000 barrels per day on top of its current reduction agreement, beginning in January. West Texas Intermediate crude for January delivery CLF22, +1.20% on the New York Mercantile Exchange rose 37 cents, or 0.6%, to $58.80 a barrel, after finishing Thursday’s session flat. February Brent crude BRNG20, +1.20% added 70 cents, or 1.1%, to settle at $64.09 a barrel on ICE Futures Europe, after gaining 0.6% in the previous session.
Gold futures dropped sharply Friday after the U.S. jobs report pushed up U.S. Treasury yields. Gold for February delivery GCG20, -1.27% fell $17.70, or 1.2% to $1,465.40 an ounce on Comex.
The U.S. dollar, as measured by the ICE U.S. Dollar Index DXY, +0.40%, rose 0.3% to 97.67 against a basket of a half-dozen currency peers.
European stocks were higher, with the Stoxx 600 Europe index SXXP, +1.09% up 1.0% at 406.00.
In Asia overnight Friday, the Hang Seng HSI, +1.07% advanced 0.2%, the China CSI 300 000300, +0.59% rose 0.6%, while the Shanghai Composite Index SHCOMP, +0.43% closed 0.4% higher.
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