Wall Street gets excited about jobs data and a pause in Fed hawkish policy

Wall Street gets excited about jobs data and a pause in Fed hawkish policy
September 1, 2023 – 2:44 p.m.

Trader bets indicated the Fed is likely to keep rates unchanged in September

New York Stock Exchange

Two of the main indices of Wall Streethe S&P 500 and Dow Jones trading higher after a report was released that revealed that the unemployment rate in August increased and that wages increased less than estimated. These data raise expectations that the federated reservel to end his harsh tone on monetary policy, since he could pause his increases in interest rates.

In that context, the Dow rises 0.2% to 34,787.07, the S&P 500 it does so up to 4,511.18 (0.8%) and the nasdaq falls 0.7%.

The report of work Department revealed that the unemployment rate rose to 3.8% last month, exceeding expectations that it would remain at 3.5%. In addition, wages increased only one 0.2% monthlycompared to the 0.4% registered in July.

payroll non-agricultural reported the creation of 187,000 jobs in Augustexceeding the expectations of 170,000according to a survey ofand Reuters among economists. However, the data for July were revised downwards, showing an increase of 157,000 jobs instead of the previously reported 187,000.

Wall Street: the bet of the operators on the interest rates

bets on the operators indicated that the Federal Reserve will likely keep rates unchanged in September, with a 93% probabilitywhile expectations of a pause in November rose to 63%, compared to 44.5% the week beforeaccording to CME Group’s FedWatch tool.

Rick Mecklera partner at Cherry Lane Investments, commented: “The data is quite mixed. The initial upward reaction is because the market has been very focused on not seeing any outliers suggesting that rate hikes are likely to keep coming. I think these numbers probably put the Fed back on track for a more moderate rate hike.“.

The payroll report adds to recent data that has shown a decline in job offers and employment growth in the private sector below expectationswhich suggests weakness in the labor market.

Also, an inflation report supported expectations of a pause in the Fed’s tightening campaignwhich led to nasdaqwith a large technological weight, to reach its maximum in four weeks on Thursday.

On the other hand, on Friday, a survey by the Institute of Management and Supply showed that the US manufacturing sector contracted for the tenth consecutive month in August.

Source: Ambito

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