- Wall Street opens slightly higher
- Strong dollar does not hinder the continuation of gains
- Bond yields slightly battered after the labor market report
The last trading day of this week brings an extension of good sentiments. Although the indices are close to this year's highs, the gains are maintained. US500 opens 0.10% higher, and currently is gaining around 0,50% with the quotations being just 0.50% off this year's highs and 4.10% off historical peaks. The rise in the stock market is not hindered by the strengthening dollar, which has been in an upward trend since the end of November.
NFP
Today, the labor NFP report came much stronger than expected. However, despite higher increase in employment and strong wage gains, this is unlikely to prompt immediate action from the Federal Reserve. Although the data indicates a resilient job market, Federal Reserve officials are expected to maintain interest rates unchanged at their upcoming meeting. The data suggests the job market is slightly stronger than anticipated, with hiring and average hourly earnings growth exceeding expectations, yet there's a visible slowdown compared to earlier in the year. This slowdown, alongside signs of cooling inflation, may reassure policymakers that their current strategies are effective. The resilience of the job market has raised hopes for a "soft landing," balancing inflation moderation without triggering a recession.
US500
Looking at the US500 from a technical perspective, we see the beginning of consolidation at the very top of the recent gains. Technical indicators are starting to cool down a bit. In case of any correction, it is worth monitoring levels 4560 and 4500, which are the first support lines. In the case of a move in the opposite direction, the first range is this year's peak, that is 4630 points.
Source: xStation 5
Company News:
Microsoft (MSFT.US) and OpenAI Inc.'s partnership is under scrutiny by the UK's Competition and Markets Authority (CMA), which is considering a full investigation over potential UK competition issues. The partnership has deepened with Microsoft's involvement in OpenAI's governance, despite Microsoft's President Brad Smith stating they do not intend to take control of OpenAI. The CMA's focus is on whether the partnership shifts the balance of power between the two firms, as Microsoft recently became a nonvoting observer on OpenAI's board.
Lululemon (LULU.US) reported revenue guidance for the fourth quarter that fell short of Wall Street expectations. Although sales growth remains strong compared to its peers, it's slowing as higher-income consumers shift spending towards travel and entertainment instead of apparel. Lululemon anticipates a 13% to 14% revenue increase in the holiday quarter, a decrease from the 19% growth in the previous quarter. Despite robust Thanksgiving weekend sales, CFO Meghan Frank emphasized cautious planning for the rest of the quarter. For Q4, the company forecasts revenue between $3.14 billion and $3.17 billion, slightly below analysts' expectations of $3.18 billion.
