Investors divided after nonfarm payroll numbers
Stocks rallied on Friday, but finished the week lower, as investors drew conflicting conclusions about what the latest payroll numbers mean for future Federal Reserve rate hikes.
October’s nonfarm payrolls report left investors divided, fueling some concern that the Fed will persist with its hiking campaign since the labour market added 261,000 jobs. Others interpreted the findings as a sign that the labour market is beginning to cool — albeit at a slow pace — since the unemployment rate rose to 3.7 per cent.
Looking ahead to this week, US earnings for the September quarter will slow this week – 86 per cent of S&P 500 companies have already reported. Of that figure only 70 per cent of those reporting so far are ahead of expectations which is well below the norm of around 76 per cent.
Thursday we will have the US CPI report, with investors also looking ahead to next week’s midterm elections.
The Dow Jones Industrial Average gained 401.97 points, or 1.26 per cent, to close at 32,403.22. The S&P 500 advanced 1.36 per cent to settle at 3,770.55, and the Nasdaq Composite rose 1.28 per cent to finish at 10,475.25
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All the major averages capped off the week with losses. The Dow shed 1.4 per cent, ending four weeks of gains. The S&P and Nasdaq fell 3.35 per cent and 5.65 per cent, respectively, to break two-week winning streaks.
In other news, hopes of a reopening in China pushed shares of US-listed China stocks higher Friday, although the government hasn’t formally announced a pivot. The market action provided a grim irony for China – a month short of three years after the coronavirus was first detected in central China, daily cases hit a six-month high on Friday.
In company news, Warren Buffett’s Berkshire Hathaway revealed a 20 per cent rise in operating profit for the third quarter but also more than $US13 billion in losses as the value of his company’s huge investment portfolio was hit hard in the quarter’s big market sell off. That said, Berkshire’s shares have outperformed the broader market this year, with the Class A shares dropping around 4 per cent versus the S&P 500′s 20 per cent decline.
Carvana, the online used car retailer that surged during the pandemic, suffered its worst day ever on Friday. Carvana’s plunge of more than 95 per cent this year makes it a prime example of Covid darlings that were caught flat-footed when the macroeconomic environment deteriorated and pandemic trends (like huge demand for used cars) snapped back to normal.
And Twitter under Musk’s new ownership has sacked ½ of its staff, as the world's richest man has tries to manage the $US20 billion in debt he has taken out to buy Twitter
Across the sectors materials was the stand out as the possibility of China easing COVID restrictions saw commodity prices rally strongly.
Currencies
One Australian dollar at 7:15 AM is strengthened compared to the US dollar on Friday, buying 64.12 US cents (Fri: 62.94 US cents), 56.66 Pence Sterling, 93.86 Yen and 64.63 Euro cents.
Commodities
Iron ore futures are pointing to a 4.01per cent gain.
Gold added $45.70 or 2.8 per cent to US$1676.60 an ounce.
Silver jumped $1.35 or almost 7 per cent to US$20.78 an ounce.
Copper gained $25.95 or 7.6 per cent to US$368.65 a pound.
Oil advanced $4.44 or over 5 per cent to US$92.61 a barrel.
Futures
The SPI futures are pointing to a 1.3 per cent gain.
Figures around the globe
Across the Atlantic, European markets closed higher. Paris gained 2.8 per cent, Frankfurt added 2.5 per cent and London’s FTSE closed 2 per cent higher.
In Asian markets, Tokyo’s Nikkei dropped 1.7 per cent, Hong Kong’s Hang Seng jumped 5.4 per cent and China’s Shanghai Composite closed 2.4 per cent higher.
On Friday, the Australian sharemarket added 0.5 per cent to close at 6892.
Ex-dividends
ANZ Banking Group (ASX:ANZ) is paying 74 cents fully franked
Champion Iron (ASX:CIA) is paying 11.4811 cents unfranked
Macquarie Group (ASX:MQG) is paying 300 cents 40 per cent franked
Dividends payable
Cosol (ASX:COS)
Myer Holdings (ASX:MYR)
Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.
Copyright 2022 – Finance News Network
Source: Finance News Network
