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2:42 PM · 4 October 2019

Wall St. seeks to recoup losses after mixed jobs report

Summary:

  • US stocks rise to start final session of the week

  • Markets react positively to jobs report 

  • Powell speech this evening (7PM BST)

 

After a rough couple of days for stock market bulls there’s been a reprieve of sorts with US benchmarks trading higher and building on a recovery which began Thursday afternoon. The latest gains can be attributed to a positive reaction after the US jobs report for September was released. Overall the release could be described as mixed, with a pretty soft headline reading of 136k (vs 145k exp) but a sizable upwards revision to the prior (now stands at 168k after 130k prior). Read our instant view on the data here.

 

The reaction on overall seems to be that the markets are taking this as a decent set of figures, with USD gaining alongside stock indices. With the two ISM releases earlier this week and this NFP report we’ve already had the biggest data points of the month ahead of the Fed decision on 30th October. On the whole there’s clear signs of weakness in the US economy and therefore it’s not too surprising that there’s fairly high expectations for another rate cut. 

While the cut probabilities have pared back a little after the NFP release there’s still almost a 3 in 4 chance that we get another rate cut later this month. Source: Bloomberg  

The S&P500 is pushing higher since the NFP release but could face some resistance around the top of the H1 cloud which broadly coincides with the 2937 swing level. Source:  xStation 

 

It’s been a busy week for US indices and there could be more drama before the markets close this evening with Jerome Powell set to speak at 7PM (BST). The Fed chair is set to deliver the opening remarks at an event in Washington DC and any mention of the economy and/or monetary policy could have a market impact. 

 

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