The New York Stock Exchange ended split on Friday, after strong and surprising U.S. employment figures, as indexes initially reacted negatively to the news because it may be synonymous with future rate hikes.
The Dow Jones index ended in the green at 32,803.47 points (+0.23%), the Nasdaq lost 0.50% to 12,657.55 points, after falling 1.30% in the session. The S&P 500 fell 0.16% to 4,145.19 points.
It seems that the market has “rationalized its first impulsive reaction” which had been to collapse to the announcement, shortly before the opening, of 528,000 job creations against 250,000 expected for July, explained to AFP Patrick O’Hare of Briefing.com.
Investors finally “thought that these figures showed that the economy can bear” the monetary screws of the central bank (Fed).
“The other idea is also that the employment report is a delayed indicator” showing an already past state of activity and that “other reports will follow”, including that of inflation (CPI) next week.
Still, the equity market was not happy with the jump in hiring, the 0.1 point drop in the unemployment rate to 3.5% and especially the increase in hourly earnings (+5.2% over the year) because investors fear that the central bank will tighten its monetary policy even more to calm an overheating economy that feeds inflation.
“This data is certainly stronger than expected. The market had in mind, after the last meeting of the Federal Reserve in July, that it would change its foot and do less” on interest rates, said Mazen Issa of TD Securities.
“But these figures go against this version and are much more indicative of an economy that is going to need to be restrained,” he added.
Tensions on rates
Bond yields have tightened sharply, leading to the rise of the greenback.
Rates on ten-year bonds stood at 2.82% at 19:00 GMT against 2.68% the day before and those on 2 years jumped to 3.24% against 3.04%, the highest since July 20, before the last meeting of the Fed.
Better than at the opening of the session, however, five sectors out of the eleven of the S&P ended in the green, including energy (+2.04%) while crude oil prices rose slightly on Friday.
The American media and streaming giant Warner Bros. Discovery was punished (-16.53%), the parent company of HBO, having recorded a lower turnover than expected and showing losses.
Tesla fell 6.63 percent to $864.51 as its shareholders’ meeting approved an upcoming three-fold split of its stock.
New developments have also occurred in the legal battle that is brewing with Twitter as Elon Musk has resigned about his plan to buy the social network. The billionaire has accused Twitter of “fraud” in court, on the number of its monetizable users.
Twitter shares rose 3.56% to $42.52.
Meta (Facebook), which had announced the day before the next launch of a massive loan on the market for the first time in its history, lost 2.03% to $ 167.11.
The group has also decided to take a temporary break in its project to buy Within, a specialist in virtual reality because the US competition authority FTC does not see this acquisition with a good eye.
Lyft, Uber’s competitor in driverless car rental, jumped 16.62 percent to $20.28 after its footfall returned to pre-pandemic levels and reported quarterly profits, the best in its history.
On the week, the dow Jones index of star stocks is almost stable (-0.13%), the Nasdaq, dominated by technology, climbed 2.15% and the S&P 500, the most representative index of the US market, nibbled 0.36%.