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David Becker

US stocks surged higher on Friday, following a stronger than expected US jobs report. US yields moved higher in the wake of the stronger than expected numbers. Apple shares continued to rally, climbing another 2.2% on Friday and finishing the week up 3.75%. Most sectors were higher, led by energy and industrials, real-estate and utilities bucked the trend. In addition to the better than expected jobs data, the ISM reported better than expected manufacturing data.

Jobs Data Beat Expectations.

US Nonfarm payrolls rose by 128,000 in October, according to the BLS above expectations. The strong number beat even with a decline of 42,000 in the motor vehicles and parts industry due to the loss of jobs that came due to the General Motors strike. Both August and September jobs data was revised higher. August’s initial 168,000 estimates came all the way up to 219,000 while September’s jumped from 136,000 to 180,000. Together, the new estimates added 95,000 positions for the two-month period, bringing the three-month average to 176,000.

The unemployment rate, which is a household survey and different from the corporate jobs count, ticked higher to 3.6%, in line with estimates, but remains around the lowest in 50 years. The U6 which is a broader measure of employment edged up to 7%. The pace of average hourly earnings increased 0.1% to a year-over-year 3% gain, also in line with estimates. The average workweek was unchanged at 34.4 hours.


Manufacturing Sentiment Rose

The Institute of Supply Management (ISM) reported that last month its index rose to 48.3% from a 47.8% reading in September. The reading missed expectations which were for a reading f 49.1%.  A six-week strike by General Motors workers weighed on the reading. The production index was only 46.2% in October, compared with the September reading of 47.3%. The backlog of orders index was 44.1%, contracting for the sixth straight month, versus the September reading of 45.1%. Prices decreased for the fifth consecutive month.

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