Dow was off 1, advancers over decliners about 3-2 & NAZ went up 66. The MLP index wavered in the 289s & the REIT index fell 4+ to the 425s on higher interest rates. Junk bond funds were mixed & Treasuries saw heavy selling, raising yields substantially (more below). Oil gained 1 to the 74s (more below) & gold was up 7 to 2686.
Dow Jones Industrials
Private sector payrolls grew faster than expected, with 223K jobs added against a prediction of 125K. Manufacturing payrolls declined by 7K in Sep, a steeper drop than the decrease of 5K that was estimated. Employment at food & drinking establishments rose by 69K,well above the average monthly gain of 14K over the past 12 months. Job growth in the health care industry slowed to 45K after averaging 57K a month over the past year. Average hourly earnings for all employees on private nonfarm payrolls increased by 13¢ (0.4%) to $35.36 an hour. That brings gains over the past 12 months thru Sep to 4%. The labor force participation rate was unchanged for the 3rd consecutive month at 62.7% in Sep, little changed over the course of the year. The number of people who are considered to be long-term unemployed, defined as being jobless for 27 weeks or more, was little changed at 1.6M & up from 1.3M a year earlier. The long-term unemployed account for 23.7% of all unemployed people. Multiple jobholders increased by 121K to 8.66M, accounting for 5.3% of the workforce. Part-time workers declined by 95, while the number of full-time workers rose by 414K.
US economy added 254,000 jobs in September, well above expectations
Treasury yields jumped as investors digested a better-than-expected Sep jobs report. The 10-year Treasury yield rose more than 11 basis points at 3.961% & the yield on the 2-year Treasury was more than 17 basis points higher at 3.888%. Yields & prices have an inverted relationship & 1 basis point equals 0.01%. Nonfarm payrolls grew by 254K in Sep, significantly exceeding the consensus estimate of 150K. The report points to a solid economy, but it also signals to the market that the Federal Reserve is more likely to move forward with smaller rate reductions ahead. The CME Group's FedWatch tool shows traders are now pricing in an 91% chance of a qtr percentage point rate cut in Nov. The central bank lowered rates by a jumbo-sized ½ percentage point in Sep.
10-year Treasury yield soars after jobs report blows past expectations
US crude oil is on pace for its best week since Mar 2023, after Pres Biden indicated that the White House is discussing a possible strike by Israel on Iran's crude facilities in retaliation for Tehran's ballistic missile attack earlier this week. US benchmark West Texas Intermediate & global benchmark Brent have gained nearly 9% this week. West Texas Intermediate Nov contract is $74.27 per barrel, up 56¢ (0.8%) & YTD US crude oil has gained more than 3%. Brent Dec contract is $78.26 per barrel, up 64¢ (0.8%) & YTD, the global benchmark has risen more than 1%. Though oil prices have surged this week on geopolitical tensions, they have risen from a low baseline. Just last month, prices hit their lowest level in nearly 3 years as bearish sentiment swept the market on soft demand in China & plans by OPEC+ to increase production.
Crude oil set for best week since Mar 2023 on Mideast risk
Stocks climbed as investors welcomed a key monthly jobs report that showed hiring remains robust in the US economy. The Middle East crisis & a return to work at US ports also stayed in high focus. Stocks are looking to recoup weekly losses, as the markets have shown some resilience in the face of a rough week of worrying headlines. In recent days, a huge ports strike, devastation from Hurricane Helene, & the prospect of a wider Mideast conflict brought the potential to lift prices & fan inflation. Additionally, the US dockworkers strike ended after a tentative wage deal was agreed late yesterday, though some issues remain to be settled later this year.
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