Softer jobs data boosts US markets

US equity markets rallied strongly on Friday following softer-than-expected April jobs numbers. The report took some pressure off the Fed after recent hotter than expected economic data.

The Dow Jones lifted 450.02 points, or 1.18 per cent. The S&P 500 surged 1.26 per cent and notch its best day since February, while the Nasdaq Composite rallied 1.99 per cent.

All the major indexes had a winning week. The Dow and Nasdaq rose 1.14 per cent and 1.43 per cent, respectively, while the S&P 500 added 0.55 per cent.

Friday’s nonfarm payrolls report showed that 175,000 were jobs gained in April, which was way below the 240,000 jobs expected by economists surveyed by Dow Jones. The unemployment rate lifted to 3.9 per cent, versus 3.8 per cent in the prior month, according to the Bureau of Labor Statistics. Wage figures also came in less than expected, a hopeful sign for inflation.

As a result of the news, traders are now pricing in a second rate cut by the end of the year. Fed funds futures trading data indicates a nearly 50 per cent likelihood of a 25 basis point rate cut in September.

In company news, the jobs data benefited rate-sensitive megacap technology stocks, with Nvidia and Advanced Micro Devices lifting more than 3 per cent. Microsoft and Meta Platforms gained 2 per cent each.

Some strong quarterly reports from major Dow components also contributed to Friday’s rally. Biotech stock Amgen surged nearly 12 per cent after posting better-than-expected earnings and offering a positive update on an experimental obesity drug. Shares notched their best day since 2009.

Shifting to US sectors, all sectors closed higher on Friday except for Energy. Tech was the best performer, closing higher by 3 per cent, whilst Energy was the worst performer.

Futures

The SPI futures are pointing to a 0.3 per cent gain.

Currency

One Australian dollar at 7.35am was buying 66.13 US cents.

Commodities

Gold lost 0.04 per cent. Silver fell 0.52 per cent. Copper gained 1.62 per cent. Oil was down 1.06 per cent.

Figures around the globe

European markets closed higher. London’s FTSE added 0.51 per cent, Frankfurt gained 0.59 per cent, and Paris closed 0.54 per cent higher.

Turning to Asian markets, Tokyo’s Nikkei was closed on Friday, Hong Kong’s Hang Seng added 1.48 per cent while China’s Shanghai Composite was closed..

On Friday, the Australian share market closed 0.55 per cent higher at 7,628.97

Ex-dividends
Link Administration Holdings (ASX:LNK) is paying 16 cents 25 per cent franked

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

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