Markets solid after US jobs data amid Fed chief relief
LONDON (AP) — Stock markets were solid Friday after a mixed set of U.S. jobs figures and as investors continued to welcome the appointment of Jerome Powell as the next head of the Federal Reserve.
KEEPING SCORE: In Europe, Germany’s DAX was up 0.3 percent to 13,479 while Britain’s FTSE 100 was steady at 7,556. France’s CAC 40 was also unchanged at 5,509. Wall Street was poised to open higher, with Dow futures and the broader S&P 500 futures up 0.2 percent.
US JOBS: At the bell on Wall Street, traders will be reacting to some solid U.S. jobs figures for October. U.S. employers added a robust, yet lower than anticipated, 261,000 jobs in October in a bounce-back from the hurricanes that slammed the Southeast in September. The unemployment rate declined to 4.1 percent, the lowest in nearly 17 years, from 4.2 percent in September, the Labor Department said Friday. October’s burst of hiring mostly reflects a rebound from the hurricanes that temporarily depressed job gains in September. But it also shows that for all their fury, the storms did not knock the economy off course. Over the past three months, hiring has averaged 162,000. That is similar to the pace of hiring before the hurricanes.
ANALYST TAKE: “Markets still see a greater than 90 percent chance the Fed will raise rates at the next meeting,” said Neil Wilson, senior market analyst at ETX Capital. “With tax reform now on the table we have to also assume that policymakers will start to factor that in to their projections— something they have pointedly refused to do so far — and that could lift expectations for hikes in 2018.”
CURRENCIES: Currency markets don’t appear to have got too excited by the figures. The euro was up 0.1 percent at $1.1667 while the dollar fell 0.3 percent to 113.80 yen.
FED CHIEF: President Donald Trump chose Fed Governor Powell to lead the Federal Reserve after current Chair Janet Yellen’s term ends in February. Powell, a policymaker at the U.S. central bank since 2012, is expected to follow Yellen’s cautious approach to raising interest rates. His selection wasn’t a surprise for Wall Street, which had him as the front-runner.
TAX PLAN: Markets are assessing the $1.5 trillion tax cut plan unveiled by U.S. House Republicans. Under the plan, corporate rates will be cut, personal rates for most Americans will be lowered and some prized deductions will be reduced or eliminated. Attention was also turning to the latest U.S. payroll and unemployment data due out later in the day and its implications for the Fed’s interest rate policy.
CHINA DATA: The country’s service sector showed lackluster expansion last month, according to the latest Caixin purchasing managers’ index, which rose from a 21-month low but remained weaker than average. Caixin’s composite index covering both services and manufacturing fell to its lowest since July 2016. The figures add to concerns about slowing growth in the world’s No. 2 economy.
ASIA’S DAY: Hong Kong’s benchmark Hang Seng index rose 0.3 percent to finish at 28,603.61 while the Shanghai Composite in mainland China lost 0.3 percent to 3,371.74. South Korea’s Kospi gained 0.5 percent to 2,557.97 and Australia’s S&P/ASX 200 advanced 0.5 percent to 5,959.90. Southeast Asian benchmarks were mostly lower but Taiwan’s index rose. Japan markets were shut for a holiday, which thinned Asian trading volumes.
ENERGY: Oil futures extended gains. U.S. benchmark crude oil rose 15 cents to $54.69 while Brent crude, the standard for international oil prices, was up 19 cents to $60.81 a barrel in London.