4:12pm: Dow Jones lags
It has been a strong week for the Nasdaq and the S&P 500 which added more than 3% and 1%, respectively.
During Friday’s session, the Nasdaq added 0.8% to close at 19,859 points while the S&P 500 was up 0.3% at 6,090 points. The Dow Jones shed 0.3% at 44,642 points points on Friday, down 0.6% this week.
3:10pm: TikTok loses latest legal challenge
A federal appeals court has rejected TikTok's bid to overturn a law that could lead to its ban or forced sale in the United States by early 2025.
The social media giant, which boasts 170 million US users, had argued that the law was unconstitutional and would have a "staggering" impact on free speech.
The court, however, upheld the legislation, stating it "was the culmination of extensive, bipartisan action by the Congress and by successive presidents".
The ruling emphasized that the law was "carefully crafted to deal only with control by a foreign adversary" and part of a broader effort to counter national security threats posed by China.
1:44pm: A low-hire, low-fire environment
"The labor market is currently characterized by a lack of churn: soft hiring and low layoffs," Bank of America analysts wrote in reaction to the jobs data from earlier this morning.
"We see evidence for this in the HH survey, where the average duration of unemployment ticked up to 23.7 weeks, above 2019 levels (Exhibit 6). In short, it's becoming harder to find a job. But as long as initial jobless claims and layoff rates stay low, we think a soft landing should still be the base case."
12:45pm: Stocks mixed at midday
US stocks are mixed in midday trading as investors digest the latest jobs data.
The S&P 500 is up 0.1% at 6,083, while the Nasdaq has gained 0.6% to 19,821. However, the Dow Jones Industrial Average is lagging, down 0.3% at 44,630.
The Russell 2000 is also in positive territory, rising 0.4% to 2,405.
The mixed performance comes after the release of the November jobs report, which showed the US economy added 227,000 jobs, slightly above expectations. The unemployment rate unexpectedly rose to 4.2%. This "Goldilocks" scenario has increased market expectations for potential interest rate cuts by the Federal Reserve, with an 88% likelihood of a quarter-point rate reduction on December 18.
Tech stocks are leading the gains, contributing to the Nasdaq's outperformance. Meanwhile, the slight decline in the Dow suggests some caution among investors in blue-chip stocks.
11:25am: Retailers surge on earnings beat
Some big movers on earnings today.
Lululemon Athletica Inc (NASDAQ:LULU) (Lululemon Athletica Inc (NASDAQ:LULU)) shares surged surged over 17% after the athletic apparel brand’s third quarter earnings impressed.
Revenue increased by 9% year-over-year to $2.4 billion, above Wall Street estimates of $2.36 billion.
Earnings per share were $2.87, up from $2.53 in the year-ago quarter and topping expectations of $2.72.
And Ulta Beauty Inc (NASDAQ:ULTA) (Ulta Beauty Inc (NASDAQ:ULTA)) delivered profits for the third quarter that far exceeded market expectations, sending shares of the beauty retailer more than 10% higher in early trade.
Earnings per share of $5.14 topped estimates of $4.55 and were up from $5.07 in the year-ago quarter.
10:46am: November jobs report has ambiguous implications for Fed policy
The November jobs report confirms that October's slowdown was driven by temporary factors, according to Bill Adams, Chief Economist for Comerica Bank.
"Job growth rebounded in November as the economy recovered from Hurricanes Milton and Irene and the Boeing strike ended," Adams wrote.
"Looking through the distortions of those one-off shocks, the three-month average of job growth is a moderate 173,000.
"Even so, there’s a meaningfully larger margin of slack in the job market than a year and a half ago."
The report isn't likely to firm up any direction the Fed may take with regard to monetary policy, Adams added.
"One the one hand, there’s clearly more slack in the job market than a year or two ago—that argues for more rate cuts. On the other hand, wage growth continues to run faster than in the pre-pandemic period, which could sustain inflationary pressures in labor-intensive industries—that argues against them.
"Weighing the risks in both directions, the Fed is more likely than not to cut the federal funds target another quarter percent at the December decision, since they are confident that interest rates are currently restrictive and they want rates to be less of an obstacle for the economy in 2025."
9.41am: Stocks open higher as rate cut hope build
Wall Street was in a positive mood after non-farm payroll figures showed the addition of 227,000 jobs across the US economy in November on Friday.
Both the Nasdaq and S&P 500 opened 0.3% higher, while the Dow Jones ticked up 0.2%.
Markets had been braced for the non-farm payroll figures, which exceeded expectations, as the debate around whether the Federal Reserve will cut interest this month went on.
Futures markets were pricing in an 89% chance of a December rate cut in the wake of the data, compared to 68% beforehand.
“A strong November non-farm payrolls at 227,000 included some reversals from October and was further offset by a tick up in the unemployment rate to 4.24%,” Janus Henderson Investors’ Adam Hetts commented.
“This big rebound from a distorted October read is actually quite balanced, should relieve some economic concerns, and keep the 18 December rate cut expectations on track.
“Zooming out a bit from today, the trend of a slowly slowing labour market continues to sit in the sweet spot as far as rate cuts are concerned.”
8.59am: Dollar loses ground after expectation-beating job figures
The dollar lost ground in the wake of figures showing the addition of 227,000 jobs to the US economy last month.
Following news of the expectation-beating figure, the dollar was down 0.34% against the pound at 0.7810p.
Charles Schwab UK managing director Richard Flynn noted the data added to a string of figures showing resilience within the US economy and supported the view that the Federal Reserve could hold interest at its next meeting this month.
Wall Street futures turned green in the meantime, with the Nasdaq, Dow Jones and S&P 500 all seen around 0.1% higher respectively.
8.45am: Federal Reserve could hold interest after jobs beat - analyst
Expectation-beating non-farm payroll figures for November could leave the Federal Reserve inclined to hold interest rates later this month.
Some 227,000 jobs were added to the US economy in November, against an upwardly revised 36,000 in October and against expectations for 200,000.
Charles Schwab UK managing director Richard Flynn noted the figures added to “the recent spate of resilient economic data” in the US.
“The economy has reached a point where it is growing healthily, with fairly full employment, and consistent wage growth,” he said.
“We are seeing very little evidence that there are issues needing to be addressed.
“Hope to preserve this period of calm may encourage the Fed to lean towards a ‘hold’ decision at its next meeting, particularly amidst uncertainty around how the upcoming change in government will impact the economy.”
8.37am: US non-farm payrolls ahead of expectations
The US economy added 227,000 jobs over the course of November, non-farm payroll figures showed on Friday.
Expectations had been for the addition of 200,000 jobs, with the surge marking a bounceback after October’s upwardly revised reading of 36,000.
Unemployment ticked up from 4.1% to 4.2% as expected in the meantime, the Bureau of Labour Statistics reported.
Futures showed Wall Street little moved on the news, with the Nasdaq and S&P 500 seen in the red and Dow Jones slightly above the mark.
6.29am: Wall Street cautious before non-farm payrolls
Wall Street appeared in a cautious mood ahead of Friday’s all-important non-farm payroll figures.
Futures had the Nasdaq, S&P 500 and Dow Jones all down by 0.1% ahead of the opening bell.
Following the addition of just 12,000 jobs across the US economy through October, attention has been drawn to Friday’s figures for November.
“Markets are hoping for a balanced outcome,” Tickmill Group partner Patrick Munnelly commented.
“Not too strong to undermine the likelihood of a rate cut, nor too weak to spark concerns about economic health.”
Expectations are for 200,000 jobs to have been added to the US economy over the month, with unemployment anticipated to come in at 4.2%, against 4.1% previously.