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Markets Update, 6 October

 

 

  • Dollar and Treasury yields climb after US jobs report
  • Wall Street lower at opening bell
  • European stocks look to eurozone periphery.
  • jobs data points to rate hike

 

The number of workers on U.S. payrolls declined last month for the first time since 2010, reflecting major disruptions from the latest Hurricanes, Labor Department figures showed Friday. The jobless rate fell to a new 16-year-low while wage gains accelerated.

United States Non Farm Payrolls
Non farm payrolls in the United States fell by 33 thousand in September of 2017, following an upwardly revised 169 thousand rise in August and well below market expectations of a 90 thousand gain. It is the first drop in payrolls since September of 2010

The Dow Jones Industrial Average fell 26 points, or 0.1%, to 22746 shortly after the opening bell. The S&P 500 fell 0.2% and the Nasdaq Co mposite lost less than 0.1%.

But other parts of the report were more encouraging—showing workers’ wages jumping and the unemployment rate falling more than expected.

20171006_wirp
December is a done deal on the back of statistically ridiculous data which saw average hourly earnings rise at the highest level since the financial crisis.

While U.S. stocks were mostly muted, other markets swung following the jobs report, as some investors bet nascent signs of wage growth could push the Federal Reserve to raise interest rates again before the end of the year.
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The dollar, which is typically more attractive to yield-seeking investors in a higher-rate environment, rose, with the WSJ Dollar Index—a measure of the U.S. currency against a basket of 16 others—adding 0.4%.

20171006_wirp2_0
BLS deta sent Dec rate-hike odds soaring (to 80%) and sparked selling in bonds and stocks.In any case, the dollar is spiking.

 

The day’s moves marked a pause for major indexes, which have climbed to fresh highs this week, buoyed by broad gains across sectors. The S&P 500 climbed to its sixth consecutive closing high Thursday, posting its longest streak of records in 20 years.

20171006_stocks1
This Chart Of The Day based on the University of Michigan’s Survey of Consumers. One of the questions asked of respondents in the survey is their estimation of the “probability of an increase in the stock market in the next year” :public sentiment has grown to now reflect among the most bullish conditions in recorded history. Too good to last?…Probably.

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Oil futures plunged 3 percent on Friday, and were set to end Brent’s longest multi-week rally in 16 months following profit taking and the return of oversupply concerns.

The prospect of extended oil production cuts by the Organization of the Petroleum Exporting Countries and other producers led by Russia had supported prices in recent sessions.

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The pound is under renewed pressure today as uncertainty builds over Theresa May’s future as Prime Minister.

Grant Shapps, a Tory MP and a former party chairman, has admitted his role in a plan to put pressure on May to call a leadership election.

He said MPs were “perfectly within their rights” to call for a contest after May’s gamble to win a bigger majority at the general election did not pay off.

The British pound extended declines after slumping to a four-week low amid speculation about a challenge to Theresa May’s leadership. (BBG)

 

 The main moves in markets, from Bloomberg:

Stocks

  • The S&P 500 Index fell 0.2 percent at 11:38 a.m. in New York.
  • The CBOE Volatility Index rose 6.2 percent after closing at a record low Thursday.
  • The Stoxx Europe 600 Index sank 0.4 percent.
  • The MSCI Emerging Market Index dropped 0.1 percent.

Currencies

  • The Bloomberg Dollar Spot Index was little changed after hitting the highest in more than 11 weeks.
  • The euro erased losses, rising 0.1 percent to $1.1726.
  • The yen was little changed at 112.84 per dollar, erasing a decline of 0.5 percent.

Bonds

  • The yield on 10-year Treasuries advanced one basis points to 2.36 percent, after touching the highest in more than 12 weeks.
  • Germany’s 10-year yield rose less than one basis point to 0.46 percent.

Commodities

  • West Texas Intermediate crude decreased 3 percent to $49.26 a barrel.
  • Gold rose 0.3 percent to $1,271.95 an ounce, after falling as much as 0.6 percent.
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