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Nasdaq Index, Dow Jones, S&P 500 News: Anticipation Builds Ahead of US Non-Farm Payrolls Report

By:
James Hyerczyk

Tech giants fuel the Nasdaq's winning streak as markets grapple with the Fed's stance amid job market fluctuations.

S&P 500, Dow Jones, Nasdaq Composite

In this article:

Highlights

  • Economists expect a significant uptick in November job additions, challenging economic slowdown concerns.
  • Wage growth and unemployment rates play a pivotal role in shaping the Fed’s policy decisions.
  • The market’s direction hinges on the outcomes of the Payrolls report and the Fed’s response.

Overview

In the financial markets, anticipation is building around the upcoming U.S. Non-Farm Payrolls report, a critical determinant of economic health and potential Federal Reserve actions. With the Dow Jones Industrial Average and S&P 500 futures showing minimal changes, investors are maintaining a cautious stance as they await the job report’s release.

Key Expectations from the Job Report

Economists anticipate the addition of 190,000 jobs in November, a notable uptick from October’s 150,000. This increase, if realized, suggests a resilient labor market, contradicting expectations of an economic slowdown. However, a robust jobs report could potentially complicate the Federal Reserve’s rate hike strategy, as it seeks to balance inflation control with economic growth.

Wage Growth and Unemployment: Key Factors

The job report’s impact extends beyond the total number of jobs added. Wage growth and the unemployment rate are also pivotal. Expected wage growth of 0.3% month-over-month and 4% year-over-year could influence the Fed’s inflation outlook. The unemployment rate, currently at 3.9%, will be closely examined for signs of economic strength or weakness.

Market Implications and Trader Sentiment

A significantly positive or disappointing jobs report could lead to market reevaluations of the Fed’s interest rate trajectory. Investors are currently leaning towards a less aggressive Fed stance by the second quarter of 2024. This week’s data, including lower-than-expected jobless claims and private payroll additions, has painted a picture of a softening yet resilient job market.

Tech Sector’s Performance

The Nasdaq Composite, buoyed by strong performances from tech giants like Alphabet and AMD, is on track for a sixth consecutive winning week, contrasting with the less optimistic S&P 500 and Dow Jones.

Anticipating the Payrolls Report

The Non-Farm Payrolls report is not just about the number of jobs added; it’s a comprehensive snapshot of the labor market’s health. Metrics like wage growth and unemployment rate provide deeper insights into economic trends and guide the Federal Reserve’s policy decisions.

The stock market’s direction in the coming days will heavily depend on the outcomes of the U.S. Non-Farm Payrolls report and subsequent Federal Reserve actions.

A positive jobs report, indicating robust economic health, could bolster investor confidence but might also signal continued aggressive rate hikes by the Fed. Conversely, a weaker-than-expected jobs report could fuel expectations of a more dovish Fed stance, potentially soothing market volatility but raising concerns about economic slowing.

Technical Analysis

Daily E-mini Nasdaq-100 Index

Analyzing the E-mini Nasdaq-100 Index using the provided technical indicators, the current daily price of 16228.00 shows a positive momentum as it is higher than the previous close of 16038.75. This uptick suggests short-term buying interest.

When compared to the 200-day moving average (14532.01) and 50-day moving average (15344.42), the current price is well above both, indicating a strong bullish trend in the medium to long term.

The price is also above the main support level (15717.75), reinforcing the bullish sentiment. However, as it hovers around the minor support level (16203.25), which now acts as a pivot, the market may be cautious, observing if it can sustain this level to continue the upward trajectory.

Overall, the market sentiment appears bullish, but watchfulness is advised near the pivotal minor support level for any signs of reversal.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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