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Monday, March 20, 2023

Wall Street trades volatile on US jobs data

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He 10-year note yield -the benchmark for global borrowing costs- surpassed the 4% level on Thursday, reaching a new maximum of four months of 4.06%. That of two-year papers, which better reflects the short-term interest rate expectationshit a new 15-year high at 4.93%.

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“It doesn’t look like the labor market is responding to the rate hike. The unit cost of labor is double expectations, because wages are going up and productivity is going down, so nothing really favors the markets,” he said. Jack Ablininvestment director of Cresset Capital in dialogue with Reuters.

After mediocre results in February, Wall Street indices started March with volatilityas new evidence of continued price pressures and comments from various Federal Reserve officials fueled fears that the US central bank would remain hawkish for longer.

He S&P 500 and Nasdaq were down after data showing that the US manufacturing sector contracted for the fourth consecutive month in February, although commodity prices increased last month.

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He Dow Jones Industrial Average rises 92.89 points, or 0.3%, to 32,754.75 units, while Salesforce Inc It soared 12.9% after the cloud-based software firm forecast first-quarter revenue above analyst estimates and doubled its share buyback to $20 billion.

He S&P 500 It subtracted 10.39 points, or 0.3%, from 3,944.11, but was trading near its 200-day moving average, considered a key support level by traders. He Nasdaq Composite it lost 53.41 points, or 0.4%, to 11,326.22.

Tesla Inc declines 7.8% after the four-hour presentation by its CEO, Elon Muskand his team will not impress investors, with few details about his plan to introduce an affordable electric vehicle.

Macy’s Inc gains 9.6% after the department store operator provided a profit for the whole year above Wall Street estimates.

Data from Europe had already boosted the returns of US public debt, since inflation figures for the zone euro, stronger than expected, supported expectations that interest rates would rise and stay that way for longer. In addition, the head of the European Central Bank, christine lagardeanticipated further rate hikes.

The expectations that the Fed will have to raise rates 50 basis points at their next meeting this month they rose slightly on Thursday, according to CME Group data, though the consensus was still for a 25 basis point rise.

The probability that the Federal Reserve cost of creditcurrently set between 4.5% and 4.75%, could go up to 5%-5.25% this month was around 34%, compared to 30% on Wednesday.

“Certainly rates will continue to rise for longer, but risks of higher than quarter point hikes could be back on the table,” he said in a note. Edward MoiaOANDA Market Analyst.

Source: Ambito

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