The New York Stock Exchange moved without a clear trend at the start of trading on Friday, following the announcement of a much better-than-expected figure for job creation in May.
At the end of the morning, the Dow Jones advanced by 0.1% to 38,928 points, while the Nasdaq Composite fell by more than 0.2% to 17,126.7 points.
Investors learned this morning that the US economy created 272,000 new jobs last month, almost 100,000 more than expected, since the consensus was for 180,000.
While this figure tends to reinforce the impression of a solid US economy, it should also encourage the Federal Reserve not to rush into interest rate cuts.
Combined with an unexpected rise in wages, this very likely eliminates the possibility of a rate hike in September, as there are no concerns about the full-employment aspect of the Fed’s dual mandate at present”, points out Jeff Schulze, at Clearbridge Investments, a subsidiary of Franklin Templeton.
We still haven’t reached an inflection point in the labor market, and today’s better-than-expected figures may well have a lasting influence on the Fed’s next decisions”, adds Mahmoud Alkudsi, market analyst at ADSS.
However, market participants seem perplexed by the significance of this news, unsure as to whether it is preferable for the Fed to delay monetary easing or for the economy to remain solid.
On the bond market, the yield on 10-year Treasuries climbed back to almost 4.42% after falling yesterday to its lowest level since March.
The dollar strengthened its gains against the euro, while crude oil prices continued to rise on the back of the jobs report, which confirmed the health of the US economy and thus the strength of demand.
On the NYMEX, U.S. light crude (WTI) advanced by 0.3% to $75.8, but lost around 1.5% over the week as a whole.
Among individual stocks, Nvidia was down 1.4%, as the processor manufacturer will proceed with a ten-for-one stock split this evening.
Note that 3M gained over 1% in the wake of a recommendation upgrade to buy by analysts at BofA, who welcomed the arrival of a new CEO at the head of the American industrial group.
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