Jobs report pushes US market to new record close

The broader market surged to new highs following the release of the much anticipated jobs numbers which pointed to a cooling labour market raising hopes the Fed will stick to its rate cut forecasts for later this calendar year.

The broad S&P 500 added 0.54 per cent closing at a new record high of 5,567. The Nasdaq closed 0.90 per cent higher to also set a new record close at 18,352. The Dow Jones finished the day 0.17 per cent higher.

The key focus on the day was the nonfarm payrolls data for the month of June. Non-farm payrolls rose by 206,000 and job growth in the previous two months was revised down by 111,000. The unemployment rate rose to 4.1 per cent as more people entered the labour force, and average hourly earnings cooled.

Friday’s data follows other recent data points that have shown a consistent decline in job openings this year and an upward move in the unemployment numbers.

The softer labour market print combined with encouraging recent inflation data measures was enough to raise the hopes of investors that the Fed will cut rates as early as September. The jobs report is the last before Fed officials meet later this month.

The improving rate outlook was reflected in US Treasury yields. The US 10 year treasury yield fell 7 bps to 4.277 per cent, whilst the 2 year treasury yield fell 9 bps to 4.604 per cent. Investors raised their bets on a September interest rate cut, with odds of a quarter-point cut increasing to about 77 per cent, up from 64 per cent a week ago, according to the CME Group’s FedWatch Tool.

In company news, Tesla rose more than 2 per cent continuing its bounce back finishing the week 27 per cent higher. Apple shares jumped more than 2 per cent to a new all-time high. Nvidia fell nearly 2 per cent after Wall Street research house, New Street Research, downgraded the outlook for the chipmaker citing limited upside for the foreseeable future.

Turning to US sectors, the best performer was Communications which finished 2.74 per cent higher. The worst performer was Energy which closed down 1.52 per cent.

Futures

The SPI futures are pointing to a 0.1 per cent fall.

Currency

One Australian dollar at 7.30am was buying 67.43 US cents.

Commodities

Gold added 1.19 per cent. Silver jumped 2.75 per cent. Copper gained 2.61 per cent. Oil fell 0.86 per cent.

Figures around the globe

European markets closed mixed. London’s FTSE fell 0.45 per cent, Frankfurt added 0.14 per cent, and Paris closed 0.26 per cent lower.

Turning to Asian markets, Tokyo’s Nikkei closed flat, Hong Kong’s Hang Seng lost 1.27 per cent while China’s Shanghai Composite closed 0.26 per cent lower.

On Friday, the Australian share market closed 0.12 per cent lower at 7,822.26

Ex-dividends
Collins Foods (ASX:CKF) is paying 15.5 cents fully frannked

Dividends payable
Danakali Ltd (ASX:DNK)

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.

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