Wall Street concludes close to balance after strong employment figures

(New York) The New York Stock Exchange ended Friday with no direction, not far from balance, after a session spent digesting stronger than expected employment figures which, while reflecting a strong economy, reinforce the Fed’s intention to raise rates sharply in July.

According to final results at the close, the Dow Jones index fell 0.15% to 31,338.15 points and the tech-heavy NASDAQ climbed 0.12% to 11,635.91 points, taking a fifth positive session in a row. The S&P 500 finished at 3899.38 points (-0.08%).

Over the week, the indices ended in the green at +0.77% for the Dow Jones, +4.56% for the NASDAQ and +2.08% for the S&P 500.

The US labor market came as a surprise on Friday with job gains well above the 250,000 expected in June.

The unemployment rate remained stable at 3.6% for the fourth month in a row.

“Overall, the jobs data supports our view that talking about an economy in recession right now is fanciful,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics.

Earlier in the day, the market had reacted negatively to the good news, seizing the opportunity to take profits after a strong start to July and fearing that the good health of the economy could further convince the Fed to tighten the screw. monetary.

Fewer salary increases

But, highlight of the report, the rise in wages stabilized at +0.3% over the month, “showing that inflation is stable” on this side, commented for AFP Art Hogan, from B. Riley Wealth Management.

“These wage data suggest that inflationary pressure is easing,” added Ian Shepherdson.

Regarding the job creation figures, “if we look at the trend, over three months, we have gone from 383,000 monthly job creations to 372,000, so it is slowing down without falling off the cliff”, continued to congratulate Art Hogan.

This employment report will in any case confirm the Fed’s desire to raise interest rates by 75 basis points at its meeting at the end of July, to calm inflation at its highest level in 40 years.

Thus, a representative of the Fed, Raphael Bostic, of the antenna of Atlanta, he confirmed his position in favor of such an increase while “the economy remains strong” and that the American central bank wants “try to bring down inflation while keeping the economy as strong as possible”.

For Gregori Volokhine, portfolio manager at Meeschaert Financial Services, by finishing almost stable, “optimism” finally prevailed over the market which considered that “the Fed could be aggressive early and quickly”.

“It may be almost finished its work in September and the economy will support it, because an economy as strong as the one we see can still support rate hikes”, underlined the expert with from AFP.

In the bond market, yields on 10-year notes rose a little to 3.07%, but remained well below their level of two weeks ago, at almost 3.50%.

Defensive stocks such as those related to health ended modestly in the green (+0.27%), such as the health insurance firm UnitedHealth (+0.83%) or, better, that of the manufacturer of vaccines against COVID -19 Modernas (+2.22%).

The materials sector fell the most (-1%), followed by real estate (-0.55%).

The popular Costco chain climbed 1.33% to $501.54, following better-than-expected monthly sales.

Levi Strauss was hailed (+1.04%), after announcing sales up 15% year on year on 2^e trimester.

Twitter fell 5.10% following reports from the Washington Post that Elon Musk’s $44 billion deal to buy the social media giant is in jeopardy.