Friends
This morning’s job report was a stunner. The non-farm payroll number came in much higher than expected with 271,000 new jobs created in October. The unemployment rate fell to 5% which was about as expected, but most importantly the average hourly earnings number increased by 0.4% which was better than expected and somewhat encouraging.
With the thought that the Fed is much more likely to begin liftoff come December, bonds sold off immediately as the 10 year Treasury note saw its yield spike to 2.33%. Both gold and oil sold off as the dollar surged (remember other developed nations are in easing mode while we appear to be heading towards a tightening mode). As for stocks, market participants seemed to struggle with whether this good news was good for stocks or not. You know all the arguments, so I won’t list them again, but suffice it to say it will be interesting to see how traders react on Monday after sleeping on it over the weekend.
By the close, the Dow Jones Industrial Average was up 46 points to finish the day at 17,910. The S&P 500 was down a fraction to close at 2099. The aforementioned gold was down $16 to trade at $1088, while oil was down $.76 to trade at $44.44 per barrel WTI.
It appears that many market participants are now in the camp that says the Fed raises rates in December. One can assume the direction of bond prices, but the direction of stocks is up for debate. Let’s see what markets have in store for us next week.
Have a great weekend everyone.
