US Open: Markets bet on the end of hikes 📌

• Wall Street gains after weaker labor market data
• Investors stop believing in further interest rate hikes
• Cloudflare (NET.US) and Booking (BKNG.US) published quarterly results

The end of the week brings an extension of better sentiment in the stock market. October labor market data reinforces the belief among investors that the Fed has already ended the cycle of interest rate hikes. Additional arguments for the end of hikes could be today's comments from Tom Barkin of the Richmond Fed. Is the market's reaction justified?

Labor Market Situation

The labor market data already brought better moods on Wednesday when the ADP report for October showed a smaller increase in new employees. These data gave markets hope that the Fed might end the cycle of interest rate hikes. At the conference on Wednesday, Powell emphasized that normalizing the labor market situation will be necessary to reduce price pressure.

Today's NFP data confirmed this trend, and the actual data turned out much worse than expected. The actual data showed that the US economy added 150,000 new jobs in October compared to expectations of 180,000. Moreover, unemployment rose to 3.9% against expectations of 3.8%. The worse data triggered a positive reaction in the markets because the chances of another interest rate hike in December have significantly decreased. Currently, at the December 13 meeting, the probability of leaving rates at the current level is 90%.

The increases in the markets are also supported by a weakening dollar, which has lost 1.6% (USDIDX) over three days, and today's declines have significantly accelerated. Prices of 10-year bonds are also rising. As a result, yields have fallen from levels close to 5.0% recently to almost 4.50% now.

Fed Comments

After today's NFP data from the USA, the labor market situation was commented on by the Richmond Fed Chairman Tom Barkin. The banker believes that the labor market is returning to balance, which means that the effects of the aggressive cycle of interest rate hikes are already visible. Barkin also sees evidence that price pressure in the market is somewhat decreasing. However, before the next decision in December, the Fed needs to see a sustained trend in the observed data. Therefore, two CPI readings and labor market data for November will be crucial.

The US500 index is gaining 1.0% today. The index has had 5 days of gains, gaining a total of 5.20%. The support level at 4170 points has been defended. This level coincided with the 61.8% Fibonacci retracement of the last upward trend. It means that formally we are still in an upward trend. The key level to watch is the resistance at 4370-4400 points, where we currently are. Source xStation 5

Company News

• Cloudflare (NET.US) shares gain over 7% after the infrastructure software company reported its third-quarter results and even despite the company gave a fourth-quarter revenue outlook that was below expectations

• Booking (BKNG.US) shares drop 0.7% after the online travel agency reported third quarter results. While the print came in ahead of estimates, analysts noted commentary on the impact the Israel-Hamas war has had on demand, with Citi saying it likely led to the company guiding fourthquarter room-night guidance lower

• Udemy (UDMY.US) gains as much as 40% after the online learning company boosted its revenue guidance for the full year, beating the average analyst estimate. The firm also posted thirdquarter revenue that was ahead of consensus, with an analyst describing the report as encouraging.

• Monster Beverage (MNST.US) gains 7.5% after the energy-drink maker reported improving gross margin results and said sales were off to a strong start in the current quarter. Analysts are broadly positive on the report, though third-quarter sales fell just short of expectations