CNBC Daily Open: U.S. jobs growth kicked off with a bang

A “Now Hiring” signal at an Advance Auto Parts retailer in San Leandro, California, US, on Tuesday, Aug. 15, 2023.

David Paul Morris | Bloomberg | Getty Images

This report is from right now’s CNBC Daily Open, our worldwide markets e-newsletter. CNBC Daily Open brings traders on top of things on all the pieces they should know, irrespective of the place they’re. Like what you see? You can subscribe here.

What it is advisable know right now

Stocks shut up
Wall Street closed higher Friday, with the S&P 500 hitting a recent excessive, boosted by earnings from mega tech corporations and the stronger-than anticipated January jobs report. The benchmark S&P gained 1.07%, whereas the Dow Jones Industrial Average added 0.4%. The Nasdaq Composite gained 1.74%. This is one other busy week of company earnings for markets, together with outcomes from McDonalds and Ford

Powell’s cautious tone
Federal Reserve Chair Jerome Powell in a “60 Minutes” interview aired Sunday mentioned the central financial institution will proceed fastidiously with rate of interest cuts this yr. “We simply need some extra confidence earlier than we take that essential step of starting to chop rates of interest,” he mentioned.

U.S. led Houthi strikes
U.S. and U.Ok. forces “conducted strikes towards 36 Houthi targets at 13 places” in Yemen, U.S. Central Command mentioned over the weekend. NBC News is at the moment the one information group embedded with the U.S. Navy within the Red Sea whereas it’s conducting strikes.

Apple’s China downside
Apple is dealing with issues in China, a crucial market for the tech large. More cautious shopper sentiment and stiff competitors from Huawei pose a enormous problem for Apple, which noticed iPhones gross sales plunge in China.

[Pro] Citi’s high international picks
Citi highlighted its listing of “high-conviction” stock picks throughout international markets. “We establish catalysts that may set off outperformance and selected liquid names during which traders can construct positions,” Citi mentioned, giving one over 50% upside.

The backside line

U.S. jobs growth began the yr firing on all cylinders.

January’s report out on Friday was a blowout. It indicated outstanding energy of the labor market, which bodes effectively for the broader financial system.

Employers added 353,000 jobs for the month, defying economists’ forecasts. The unemployment charge held regular at 3.7%, towards the estimate for 3.8%. What’s extra, each November and December knowledge have been revised up.

There was extra excellent news on the wage entrance, which got here in robust, up 4.5% final month from a yr earlier. Average hourly earnings additionally elevated 0.6%, double the month-to-month estimate. 

The White House seized on the strong knowledge for a fast victory lap, unsurprisingly.

“America’s financial system is the strongest on the planet. Today, we noticed extra proof…” President Joe Biden said in a statement. 

“Our financial system has created 14.8 million jobs since I took workplace, unemployment has been below 4% for 2 full years now, and inflation has been on the pre-pandemic degree of two% during the last half yr,” he added. 

Yet, the job market’s stunning resilience throws a wrench into the Fed’s plans to decrease rates of interest. 

Last week, Fed Chair Jerome Powell primarily dominated out a March rate cut, citing a want for extra proof that inflation was firmly below management.

A scorching jobs report will seemingly gas the Fed’s thinking to additional delay charge cuts for this yr. This means, traders could have to readjust their expectations. 

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