FXEMPIRE
All

U.S. Stock Market: Saved by Robust Jobs Report, Stellar Consumer Sentiment

By the end of the week, the stock market ship had righted itself, moving higher on the back of fresh data on the labor markets and the stunning report on consumer sentiment. Both reports underscored the overall health of the U.S. economy while putting the major equity markets in a position to retest all-time highs this week.
James Hyerczyk
U.S. Equity Markets

The major U.S. equity markets finished mixed in a week where economic data moved to the forefront, bypassing confusing trade-deal news. International equity markets outperformed U.S. markets on the back of the fourth straight month of improvement in global manufacturing PMI, a proxy for global growth.

“The surveys are consistent with a still soft but improving demand environment, which suggests to us that the manufacturing down cycle may have run its course,” analysts at Edward Jones said.

The U.S. stock market posted its biggest one day gain in over a month on Friday following the November jobs report, which showed robust job gains, rising wages, and an unemployment rate that retested a 50-year low. This news combined with a seven-month high in consumer sentiment, provided further evidence that the resilient U.S. economy is back on track to finish the year on solid footing.

In the cash market last week, the benchmark S&P 500 Index settled at 3145.91, up 0.2%. It is up 25.5% this year. The blue chip Dow Jones Industrial Average closed at 28015.06, down 0.1%. It has gained 20.1% so far this year. The technology-based NASDAQ Composite finished at 8656.53, down 0.1%. For the year, it is up a whopping 30.5%.

Weekly Roller Coaster for Stocks

The market was hit hard early in the week in reaction to weaker-than-expected ISM Manufacturing PMI data which fell further into contraction territory for the fourth straight month to a near decade-low level.

Although investors sold stocks initially to the news, some analysts downplayed the weakness saying that during this current expansion, the ISM manufacturing PMI went through five straight months of drawdowns in 2015.

By the end of the week, the stock market ship had righted itself, moving higher on the back of fresh data on the labor markets and the stunning report on consumer sentiment. Both reports underscored the overall health of the U.S. economy while putting the major equity markets in a position to retest all-time highs this week.

Fed Will Be Cautious

If you recall last December, the Federal Reserve increased its benchmark interest rate to 2.5%, the highest level of the expansion. This triggered a steep plunge in U.S. equity markets that came to a screeching halt on Christmas Eve.

This week, the Fed meets again to announce its rate policy after cutting the Federal Funds rates three time in 2019 to between 1.50 – 1.75%. Given that rate hikes tend to signal the end of bull markets, investors are more likely to expect central bank policymakers to lower benchmark rates than to raise them.

However, we think the Fed is most likely to hold rates steady.

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All
IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US